Dubai authorities confirmed that the primary purchase of housing in the emirate will be subject to VAT, which will significantly affect the market for projects under construction, writes Arabian Business .
At a briefing with tax advisers, the UAE Minister of Finance noted that, in general, transactions with the purchase and rental of residential real estate will be exempt from VAT, excluding the initial purchase of new real estate. The purchase and lease of commercial properties will be subject to VAT at standard rates. The new measure will come into force on January 1, 2018.
In general, experts are worried about this innovation, as buying at the construction stage is a profitable investment, and the additional tax burden of the primary transaction may lead to a temporary decline in sales.
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Maria Chernikova.
Rustar Real Estate.