Finance & FeesUpdated March 1, 2026· 3 min read
VAT on Real Estate
What is VAT on Real Estate?
In the UAE, residential real estate is generally exempt from the 5% VAT on secondary sales and on leases. The first sale of a new residential building within 3 years of completion is zero-rated. Commercial real estate is standard-rated at 5%.
Definition
VAT treatment is set by the Federal Tax Authority (FTA). Investors buying residential secondary-market property do not pay VAT on the purchase; commercial transactions do.
Key Facts
- 1Residential resale: exempt.
- 2First residential sale within 3 years: zero-rated.
- 3Commercial: 5%.
Frequently Asked Questions
Do I pay VAT on rent?
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Residential rent is exempt; commercial rent is standard-rated at 5%.
📚 Deep Dive — Related Guides
References & Further Reading
- Dubai Land Department (DLD) — official transaction & title records.
- Real Estate Regulatory Agency (RERA) — Ejari, Mollak & rental index.
- Department of Economy and Tourism (DET) — Holiday Home permits.
- Federal Authority for Identity, Citizenship, Customs & Port Security (ICP) — visa rules.
This entry is editorial and informational. It does not constitute legal, financial or tax advice.