02 / FROM THE SOURCESWhat the official documents say.
The VAT treatment of property depends on what it is and how it is used. The first sale of a newly built residential property within three years of completion is zero-rated, so the developer charges 0% but still recovers input VAT.
Later sales and leases of residential property are exempt — no VAT is charged, and the landlord cannot recover input VAT on related costs.
Commercial property — offices, shops and warehouses — is standard-rated at 5% on both sale and lease.
Sales of bare land are exempt from VAT, while sales of developed or covered land can be standard-rated.
UAE nationals building a new home for their own use can reclaim the VAT incurred on construction, provided they apply within the required window and meet the FTA conditions.
03 / THE KEY FACTSThe figures, with their sources.
| Fact | Value | Source |
|---|---|---|
| Residential property supply | Exempt (first supply of new build: zero-rated) | FTA — Real Estate Guide VATGRE1 |
| Commercial property supply | 5% standard rated | FTA — Real Estate Guide |
| Bare land supply | Exempt | FTA — Real Estate Guide |
| UAE Nationals new home VAT refund | Available — specific conditions apply | FTA — UAE Nationals Refund Guide 2026 |
04 / SOURCES & DOWNLOADSKnow what this guide rests on.
Legal basis: 2 primary source documents. Laws change; verify with the issuing authority before acting.