VAT on Dubai Property: When It Applies in 2026

Residential: Mostly VAT-Free

Commercial: Always 5%

Mixed-Use Buildings

Don't Forget Service Fees

Talk to Banke

Dubai Real Estate Insights · Taxes and Fees VAT on Dubai Property: When It Applies in 2026 Dubai has no property tax, but that doesn't mean VAT never touches a property deal — whether it applies depends entirely on whether the property is residential or commercial, and whether it's a first sale. This Banke guide clarifies the rules. Residential: Mostly VAT-Free First sale or lease

of a new residential building, within three years of completion: zero-rated. The developer can recover VAT paid on construction, but the buyer pays none. Any subsequent sale or lease: exempt from VAT entirely — no VAT charged, but the seller can't recover input VAT on related costs either. Converted buildings: a commercial-to-residential conversion can qualify for zero-rating on its first supply, but only within three

years of the conversion. Commercial: Always 5% Offices, retail units, warehouses and showrooms are standard-rated at 5% on both sale and lease — no zero-rating, no three-year test, no exemption window. This applies every time, not just on a first sale. Mixed-Use Buildings Where a building has both residential and commercial parts, each is treated separately — the residential portion follows the exempt/zero-rated rules above,

while the commercial portion carries the standard 5% rate. Don't Forget Service Fees Agency commissions, property management fees and maintenance services all carry 5% VAT, regardless of whether the underlying property itself is VAT-exempt — a cost easy to overlook when budgeting a purchase. Talk to Banke Contact Banke to confirm the VAT treatment on a specific property before you buy.