Dubai – Mubasher: The recently-levied value-added tax (VAT) will not have a great impact on the real estate sector.
All property-related transactions – except the sale of vacant commercial properties and commercial property leases – will be exempted from the 5% VAT, according to a report released on Tuesday by the Federal Tax Authority (FTA) and Dubai Land Department (DLD).
“The UAE tax system has been designed to support the real estate sector in all its activities and provide a suitable environment for its continued growth and development,” director general of the FTA Khalid Ali Al Bustani said.
VAT-free items in the real estate sector also include bare lands – provided that they are sold or leased as such (i.e. without any buildings or engineering works).
Director general of DLD Sultan Butti bin Mejren commented: “85% of components in Dubai’s total real estate sector are not subject to the 5% VAT”.
The UAE introduced a 5% VAT on 1 January 2018.
