Residential Real Estate
The sale or lease of residential buildings is exempt in Art. 43 of the Regulations as per the dispositions of Art. 46 (2) of the VAT Law.
A residential building is a building designed for human occupation to be used as a primary residence, such as a house, flat, apartment, student accommodation and accommodation of the armed forces or labour accommodation.
Based on the Public Clarification on “Farm Houses and Farm Land” (VATP008) issued by THE AUTHORITY, farmhouses which meet the conditions will be considered residential buildings.
The granting of a lease of a length of more than 6 months or where the tenant of the property is a holder of an ID card issued by the Federal Authority for Identity and Citizenship is exempt (Art. 43 of the Regulations), unless it is zero-rated.
Any building that is used as temporary accommodation for travellers is not residential real estate and therefore it is not exempt. For example, the supply of a room in a hotel, a guest house, or the supply of a serviced apartment will not be exempt.
Bare Land
The supply of bare land is exempt on condition that there are no (partially completed) buildings or civil engineering works being carried out on the land.
As outlined in the Public Clarification VATP008, farmland will also be considered bare land and therefore exempt if the plot has no buildings or civil engineering work. Facilities such as built-in irrigation would exclude the land from the exemption.
Advanced AnalytIQ Will support you as a VAT Consultant for more details Contact us.