{"id":3569,"date":"2018-01-06T11:06:05","date_gmt":"2018-01-06T05:36:05","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=3569"},"modified":"2021-12-24T14:55:50","modified_gmt":"2021-12-24T09:25:50","slug":"the-impact-of-uae-vat-on-real-estate-sector","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/","title":{"rendered":"The impact of uae vat on real estate sector"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e6309e9fb5a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e6309e9fb5a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#THE_IMPACT_OF_UAE_VAT_ON_THE_REAL_ESTATE_SECTOR\" title=\"THE IMPACT OF UAE VAT ON THE REAL ESTATE SECTOR\">THE IMPACT OF UAE VAT ON THE REAL ESTATE SECTOR<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#Real_estate_sector\" title=\"Real estate sector \">Real estate sector <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#Meaning_of_Residential_building_for_VAT_purposes\" title=\"Meaning of Residential building for VAT purposes\">Meaning of Residential building for VAT purposes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#VAT_on_Residential_property\" title=\"VAT on Residential property\">VAT on Residential property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#VAT_RATE_ON_COMMERCIAL_BUILDING\" title=\"VAT RATE ON COMMERCIAL BUILDING\">VAT RATE ON COMMERCIAL BUILDING<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#TREATMENT_OF_MIXED_%E2%80%93USE_BUILDING_RESIDENTIAL_AND_COMMERCIAL\" title=\"TREATMENT OF MIXED \u2013USE BUILDING (RESIDENTIAL AND COMMERCIAL) \">TREATMENT OF MIXED \u2013USE BUILDING (RESIDENTIAL AND COMMERCIAL) <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#VAT_on_real_estate_broker_commissions\" title=\"VAT on real estate broker commissions\">VAT on real estate broker commissions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/the-impact-of-uae-vat-on-real-estate-sector\/#TRANSITIONAL_RULE_ON_REAL_ESTATE\" title=\"TRANSITIONAL RULE ON REAL\u00a0ESTATE\">TRANSITIONAL RULE ON REAL\u00a0ESTATE<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<figure id=\"attachment_8788\" aria-describedby=\"caption-attachment-8788\" style=\"width: 793px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2018\/01\/Value-Added-Tax.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-8788\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2018\/01\/Value-Added-Tax.jpg\" alt=\"www.carajput.com; Value Added Tax\" width=\"793\" height=\"443\" \/><\/a><figcaption id=\"caption-attachment-8788\" class=\"wp-caption-text\">www.carajput.com; Value Added Tax<\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"THE_IMPACT_OF_UAE_VAT_ON_THE_REAL_ESTATE_SECTOR\"><\/span>THE IMPACT OF UAE VAT ON THE <a href=\"https:\/\/www.caindelhiindia.com\/blog\/gst-has-a-positive-impact-on-the-real-estate-industry\/\">REAL ESTATE SECTOR<\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/carajput.com\/services-vat.php\"><strong>VAT<\/strong><\/a>\u00a0is one of the most common types of consumption tax. VAT\u00a0is charged at each step of the \u2018supply chain\u2019. Ultimate consumers generally bear the\u00a0VAT\u00a0cost. The Businesses act as tax collector for the government authorities. They collect, account and pay the tax to the government.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Real_estate_sector\"><\/span><strong><em>Real estate sector <\/em><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Real-estate is one of the sectors which impacts all expatriates and citizens in UAE in the form of house rents and prices.<\/p>\n<p>The owners of residential buildings do not have to register for <a href=\"https:\/\/carajput.com\/services-vat.php\">VAT<\/a> if they do not have any other business activities. The owner of any building that is not residential, will have to register if the value of the supplies over the preceding 12 months exceeds Dh375,000 or it is expected that they will exceed Dh375,000 over the coming 30 days.<\/p>\n<p><strong>Supply in relation to real estate<\/strong><\/p>\n<p>A supply of real estate may include the sale, lease or giving the right in any real estate.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Meaning_of_Residential_building_for_VAT_purposes\"><\/span><strong>Meaning of Residential building for<a href=\"https:\/\/carajput.com\/services-vat.php\"> VAT<\/a> purposes<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A residential building is a building or part thereof that is intended and designed for occupation by individuals, and mainly includes buildings which can be occupied by any person as a main place of residence. It does not include-. Any building that is used as a hotel, motel, bed and breakfast establishment or hospital or the like or a serviced apartment for which services in addition to the supply of accommodation are provided or any building constructed or converted without lawful authority<\/p>\n<h3><span class=\"ez-toc-section\" id=\"VAT_on_Residential_property\"><\/span><strong>VAT on Residential property<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Residential property will be exempted from the VAT. Exceptions of property in UAE, on the sale of new residential property <a href=\"https:\/\/carajput.com\/services-vat.php\">VAT<\/a> will charge at zero rate of VAT whereas bare land will be exempted from VAT. The first supply of a new residential building within the first three years of it being constructed shall be zero-rated. All subsequent supplies shall be exempt, even if within the first three years.<\/p>\n<p><strong>Commercial building for VAT purposes<\/strong><\/p>\n<p>A commercial building is any building or part thereof that is not a residential building. Examples would be warehouses, hotels, shops, etc<\/p>\n<h3><span class=\"ez-toc-section\" id=\"VAT_RATE_ON_COMMERCIAL_BUILDING\"><\/span><strong>VAT RATE ON COMMERCIAL BUILDING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Commercial property (sales and leases) will be levied with <a href=\"https:\/\/carajput.com\/services-vat.php\">VAT<\/a> at the standard rate of 5 per cent.<\/p>\n<p>Valuation and prices of commercial property price are likely to increase. The commercial and retail sector is likely to be more expensive by five percent in the case of rental pricing. However, there may be an effect on the prices and valuation may be increased by two to five percent<\/p>\n<h4><span class=\"ez-toc-section\" id=\"TREATMENT_OF_MIXED_%E2%80%93USE_BUILDING_RESIDENTIAL_AND_COMMERCIAL\"><\/span><strong>TREATMENT OF MIXED \u2013USE BUILDING (RESIDENTIAL AND COMMERCIAL) <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The rent or sale of a residential part of the building shall be treated as zero-rated or exempt, depending on whether this is a first supply or a subsequent supply. The rent or sale of a commercial part of the building shall be treated as subject to VAT at 5%.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"VAT_on_real_estate_broker_commissions\"><\/span><strong><a href=\"https:\/\/carajput.com\/services-vat.php\">VAT<\/a> on real estate broker commissions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>the services of a real estate brokerage are likely to be at standard VAT 5%<\/p>\n<h4><span class=\"ez-toc-section\" id=\"TRANSITIONAL_RULE_ON_REAL_ESTATE\"><\/span><strong>TRANSITIONAL RULE ON REAL\u00a0<\/strong><b>ESTATE<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Transitional rules refer to those transactions which are going to overlap the two periods i.e. period before and after vat implementation.<\/p>\n<p>In case of the construction contracts running over the period of commencement date, VAT is not applicable on the portion of supplies provided before 31st December 2018. For real estate contracts, VAT is applicable on supplies made on or after January 1, 2018.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>THE IMPACT OF UAE VAT ON THE REAL ESTATE SECTOR VAT\u00a0is one of the most common types of consumption tax. VAT\u00a0is charged at each step of the \u2018supply chain\u2019. Ultimate consumers generally bear the\u00a0VAT\u00a0cost. The Businesses act as tax collector for the government authorities. They collect, account and pay the tax to the government. Real &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172],"tags":[705,680,701,703,708,704,710,700,707,706,711,709,702],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/3569"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=3569"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/3569\/revisions"}],"predecessor-version":[{"id":20425,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/3569\/revisions\/20425"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=3569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=3569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=3569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}