VAT on residential rent
I rent out a flat in Dubai Marina. Do I charge VAT on the rent?
The situation
Residential leases are exempt from VAT. You do not charge VAT and the rent does not count toward the registration threshold.
The law
- Art 46(2), Federal Decree-Law 8 of 2017: Residential leases exempt
What it means for you
Example: AED 120,000 a year from a flat means no VAT and no registration. You cannot recover VAT on repairs or agency fees for the flat. Corporate Tax also does not apply to an individual's personal real estate investment income.
What to do
- Confirm the unit is residential on the title deed.
- Do not add VAT to rent.
- Keep the lease and Ejari.
- Check Indian tax treatment with the India team if relevant.
We can do this for youVAT on real estate: residential and commercial sales and leases, first supply zero rating, bare land and landlord registration: AED 1,500