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VAT on a residential purchase
A new home's first sale is zero-rated, later residential sales are exempt, and commercial property carries 5%.
What the source says
"A commercial property 5% / A new residential property 0% / An existing residential property Exempt / Bare land Exempt"
Federal Tax Authority, Real Estate VAT Guide VATGRE1
| Status | Confirmed - The official source states this rule in the words quoted. |
|---|---|
| Instrument | Federal Tax Authority, Real Estate VAT Guide VATGRE1 |
| Authority | Federal Tax Authority |
| In force since | 2018 |
| Last checked | 16 October 2026 |
| Source | Federal Tax Authority |
Read the full guide
This rule is explained in context, with the costs and steps around it, in Cost of Buying Property in Dubai (2026): Every Fee, Verified.
More rules on fees
- The 4% sale registration fee - Confirmed
- Registration trustee fee on a sale - Confirmed
- Title deed fee - Confirmed
- Mortgage registration fee - Confirmed
- Mortgage release fee - Confirmed
- Gift transfer between close family - Confirmed
See all 60 rules in the register.
Cite this rule
Home Guide Dubai, "VAT on a residential purchase", Dubai property rules register, last checked 16 October 2026.
https://homeguidedubai.com/rules/vat-residential-sale/
This link stays the same when the rule changes. If the rule changes, this page shows the new text and the date it changed.
Frequently Asked Questions
Is this still the rule today?
We last read the source on 16 October 2026. Rules in Dubai change by circular and by edits to service pages, often without notice. Check the source linked above, and ask Federal Tax Authority in writing before a large payment.
Where does this rule come from?
Federal Tax Authority, Real Estate VAT Guide VATGRE1, published by Federal Tax Authority. The quote on this page is copied word for word from that source.
Sources
- Federal Tax Authority, Real Estate VAT Guide VATGRE1 - Federal Tax Authority - accessed 16 October 2026
Every rule above is quoted from the law, decree or official page on the date given. This is general information, not legal advice; rules change, so confirm the current position with the authority named before you act.