# VAT on property in the UAE: calculator

> In the UAE, the first sale or lease of a new residential building within 3 years of completion is zero-rated; later residential sales and leases are exempt; commercial property (offices, shops, warehouses, hotels) is standard-rated at 5% on both sale and rent; and bare land is exempt.

Interactive calculator: https://www.countify.ae/tools/vat-on-property-calculator · Updated 2026-10-14 · Countify UAE

## VAT on an AED 2 million property

By type of supply.

| Property | VAT treatment | VAT |
| --- | --- | --- |
| New residential (first supply) | Zero-rated | AED 0.00 |
| Residential resale | Exempt | AED 0.00 |
| Commercial | Standard-rated | AED 100,000.00 |
| Bare land | Exempt | AED 0.00 |

Hotels and serviced apartments are treated as commercial, not residential.

## Residential vs commercial

A residential building is one intended to be used as a place where people live and occupied for more than six months. Hotels, motels, serviced apartments and similar short-stay accommodation are commercial. The distinction matters for landlords too: exempt residential rent means VAT on service charges, maintenance and fit-out cannot be recovered, while commercial landlords charge 5% and recover their input VAT.

## Corporate tax on property

VAT is separate from corporate tax. Individuals who earn rental income personally, without a licence, are generally outside corporate tax; companies holding property are inside it. See the [rental yield calculator](https://www.countify.ae/tools/rental-yield-calculator) for the yield and tax picture.

## Legal basis

- Federal Decree-Law No. 8 of 2017, Articles 45–46 (https://tax.gov.ae/en/legislation.aspx)

## Frequently asked questions

### Is there VAT on buying a new apartment in Dubai?

No VAT is charged to the buyer on the first sale of a new residential unit within 3 years of completion; it is zero-rated.

### Is there VAT on commercial rent in the UAE?

Yes, 5% on rent for offices, shops, warehouses and other commercial property.

### Is residential rent subject to VAT?

No, residential rent is generally exempt, except the first lease of a new building within 3 years of completion, which is zero-rated.