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VAT for Real Estate Companies

Dubai’s real estate sector has gathered a comprehensive advantage of a lucrative market with higher investments for longevity. In Dubai everything is built to suit your lifestyle and to ease your living. The real-estate market is on the verge of new growth and is built on a solid foundation so that investors can be more enthusiastic. Dubai’s property markets are stabilised by the rules, lending caps, corporate governance and reservations introduced by Dubai Land Departments (DLD). Most of the builders follow the motto investment must be in high demand areas with low supply. Since Dubai is rich with iconic property dealers and investors this market can never shrink in the long run. Professionals in real estate should have a good knowledge on real estate VAT. 

VAT Services For Real Estate Companies in Dubai

The real-estate sector deals with:

  • Residential Revenue: Sales, Leasing, Property Management
  • Commercial Revenue: Sales, Leasing, Property Management
  • Other Real Estate Revenue: Interests earned

Residential building: A residential building is designed for human occupancy which includes:

  • Part of a building that the person occupies as their principal place of residence
  • Accommodation for students or school pupils 
  • Accommodation for armed forces and police
  • Orphanages, nursing homes and rest homes.

Charitable building: A charitable building means any building or part of a building that is used by a charity and only for charitable activities.

Bare land:  The land which is not used for any civil engineering works.

Commercial Real Estate:  As per UAE VAT guide, Commercial real estate is any land or buildings, which are not one of the following: 

  • A building designed as a residential building or number of residential buildings; 
  • A building intended for use by a charity for a relevant charitable activity; or
  • Bare land

Brief introduction to Real Estate VAT in UAE

A business register for VAT if their annual turnover exceeds the threshold of AED 375,000 as per current year. There exists an option for voluntary registration, if there is a threshold of AED 187,500. The government of UAE and the federal tax authority (FTA) defined this process of threshold for registration and reporting of VAT. The tax that they have to pay to the FTA depends on the input VAT and the output VAT. There are several different rates of VAT on the real estate sector. The real estate VAT rates includes:

  • Standard rated 5%:
    • Lease or Sale of Commercial property
    • Car Parking
    • Services related to Construction Work
  • Zero Rated:
    • First supply of buildings converted from non-residential to residential. 
    • First sale or lease of residential buildings within 3 years of its completion
    • First supply of Charity related buildings
  • Exempted:
    • Supply of residential buildings after three years
    • Bare land

Why CDA for Real Estate VAT Services UAE?

CDA experts are chosen because they are insightful of the procedures of the VAT. CDA experts provide excellent VAT services for real estate companies in compliance with the UAE Law. We know the right protocol to follow for the UAE VAT registration. That is why CDA is the first choice to be considered by the companies for their compliance with the real estate VAT laws in the UAE. At each distribution channel VAT is added up to purchase and sales, that is why it’s called as a value added tax which is obtained in a multistage of productions. There are various VAT services we provide to manufacturing companies such as;

VAT Registration

The entire process of VAT registration takes place on an online platform. In order to attain a tax registration number (TRN) one must fill the VAT registration form online and submit the essential documents required.

VAT Record keeping

Our tax consultants help you to maintain the documents in systematic manner which includes:

  • Sales invoices, purchases invoices
  • Debit and credit notes provided
  • Import and export documents.
  • Rent Income Report, Lease expiration schedule
  • Security Deposit Report
  • Financial statements
  • Property Manager Monthly Variance Report
  • Financial Projections

VAT calculations and return filing

Before calculating VAT, your business must comply with rules to avoid any penalty. VAT return depicts the tax amount due for a particular tax Period. Our experts prepare VAT return filing on 201 form and submits it to FTA authority. Small and medium businesses opt for monthly filing and large businesses go for quarterly filing through FTA portal.

VAT implementation and Compliance

Compliance with UAE VAT law is a complex task. Following each law concept and filing the tax for Lease or Sale of Commercial property, Services related to Construction Work. We assure your tax filings on time.

VAT De-registration

It is the process of cancellation of TRN. De-registration occurs when the taxable supplies fall less than the threshold limit as prescribed by FTA. Our VAT de-registration services are at a reasonable rate.

Filing reconsideration form for VAT penalties

Before submitting reconsideration forms you must pay the previous penalties and wrong filing fines. VAT penalties must be paid on time with FTA for smooth tax life. 


Frequently Asked Questions on VAT Services For Real Estate Companies

A supply of real estate includes the ownership transfers and the right to use the property

The conditions include (1) If the building is occupied by the employee as their principal place of residence, (2) If the building is immovable, (3) If the building is constructed with lawful authority, (4) If the building is not similar to food service establishments

The supply of bare land is exempted from VAT if it remains unproductive of any construction works.

As per UAE VAT guide: Input tax incurred on the development cost of new commercial real estate is recoverable in full, the developers can recover the VAT amount during development time.

VAT Service charges depend on the turnover and the number of transactions on supply.

Any taxable person must retain the VAT invoices and other notes for 5 years as per FTA.

All service charges of the Owners Association are subjected to VAT at standard rate 5%.

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