VAT on real estate: residential and commercial sales and leases, first supply zero rating, bare land and landlord registration

We tell you whether your property sale or lease is standard rated, zero-rated or exempt, whether you must register, how to invoice the rent or price, and what input VAT you can recover.

AED 1,500Per transaction

For: Landlords, property investors, developers, buyers of commercial property and businesses leasing offices, warehouses and shops, including individuals who own commercial units.

What we need from you

Title deed and property type
Residential, commercial or bare land
Completion date of the building
3-year zero rating test
Lease or sale contract
VAT clause and value
Annual rent from commercial units
Registration threshold
Costs and invoices for the property
Input VAT recovery

What we discuss

Is the property residential, commercial or mixed use?
VAT treatment differs
Is this the first sale after completion?
Zero rating may apply
Does the contract say whether price includes VAT?
Avoid disputes
Total commercial rent for 12 months?
Registration test

What we file

VAT treatment note
VAT registration if commercial rent passes AED 375,000
Tax invoices for commercial rent

What you get

VAT treatment note
Registration or invoicing set-up if needed

The law

Art 45(9), Federal Decree-Law 8 of 2017: First supply of residential buildings within 3 years of completion is zero-rated Source
Art 46(2), Federal Decree-Law 8 of 2017: Other residential sales and leases are exempt Source
Art 46(3), Federal Decree-Law 8 of 2017: Bare land is exempt Source
Art 3, Federal Decree-Law 8 of 2017: Commercial property sales and leases are standard rated at 5 percent Source

Questions people ask

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