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Half-year review: VAT in real estate
Six months into its implementation in the UAE, the 5 per cent value-added tax (VAT) has generally had a limited impact on real estate values, if average market prices in the second quarter are anything to go by. Villa and apartment sales prices retreated by an average 4 per cent over the quarter, while apartment and villa rents were down 3 per cent and 2 per cent respectively, according to Asteco’s second-quarter market report.
Various factors contribute to VAT’s muted impact on real estate, but analysts agree prevailing market rates have in a way helped belie fears of a tax backlash.