What counts as a residential building for UAE VAT?
A building intended and designed for human occupation, according to the FTA real estate guide. It includes buildings occupied as a principal place of residence, student and pupil accommodation, armed forces and police accommodation, and orphanages and nursing homes. It excludes movable structures, hotels, motels, hospitals, serviced apartments with extra services, and buildings built or converted without lawful authority.
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Small business use does not change it
A home stays residential if a small part is used as an office by the occupants, or if it includes garages and gardens used with it.
Why the definition matters
Residential buildings get zero rating on the first supply within three years of completion and exemption after that. A serviced apartment block or hotel is commercial and taxed at 5% on every supply.
How SupaJack Construct helps
Supplier bills in SupaJack Construct record the VAT charged with the supplier's TRN, and projects keep their own costs, so the input VAT on each development can be identified for recovery or apportionment.
Related tools and guides
See the VAT guide for contractors, the VAT calculator, the payment certificate calculator, the retention calculator, finance and VAT in SupaJack Construct, the answer on whether a payment certificate triggers VAT and the meaning of e-invoicing.
Worked example
A developer builds a tower with 200 apartments and a 50-key serviced apartment wing offering housekeeping. The 200 apartments are residential, and their first sales are zero-rated. The serviced wing is commercial, and its supplies carry 5%.
Questions people ask
Are serviced apartments residential?
Not where services beyond accommodation are provided.
Is student housing residential?
Yes.
Is an unlicensed building residential?
No. Buildings built without lawful authority are excluded.