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.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
- VAT treatment
- Zero-rated
- Rate
- 0%
- VAT
- AED 0.00
- Total
- AED 2,000,000.00
Dubai Land Department and other registration fees are separate and not subject to VAT.
Results are estimates for general information, not tailored advice.
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 for the yield and tax picture.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
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.
VAT registration and returns
Our FTA registered accountants register you, file every return on time and fix errors before the FTA finds them, for a fixed monthly fee.