The UAE charges VAT at 5%, but property is treated differently depending on whether it is residential or commercial. Here is a simple overview. Tax rules can change and have exceptions, so take advice for your own situation.
Residential rent
Rent for a residential home is generally exempt from VAT. Tenants do not pay VAT on the rent itself.
Commercial rent
Rent for commercial property — offices, shops, warehouses — is generally subject to 5% VAT. Read renting a shop or office in Dubai.
Buying a home
So buyers of homes usually do not pay VAT on the property price itself.
Buying commercial property
Sales of commercial property are generally subject to 5% VAT.
Fees that include VAT
Even when the rent or price has no VAT, many services do. For example:
Always ask for a tax invoice showing the VAT.
Landlords
Landlords who own commercial property may need to register for VAT if their taxable income passes the registration threshold. Residential-only landlords are generally not affected in the same way. Speak to a tax adviser if you are unsure.
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