VAT in GCC
Sector Impact > Real Estate
The EDB report also indicated that real estate transactions in Bahrain increased by 15.2 percent during the first quarter of year 2017 to a total value of 770 million dollars, an increase of 8.1 percent when compared to the same period last year, which showcase the growing importance and contribution to the Bahrain economy.
Unlike UAE, Residential properties are treated at par with Commercial properties under VAT.
Exempt: The Supply of bare land and building (Real estate) by way of sale or lease shall be exempt from Tax. Input tax credit cannot be claimed for these supplies.
The following – for the purposes of applying the provisions of Article 55 of the Law – shall not be considered as the sale or lease of real estate:
- The provision of hotel accommodation,
- The provision of paid car parking for periods of less than one month;
- The lease of serviced office space where the Customer does not have the right to use a designated space on an exclusive basis;
- Rental of a function room, hall or similar facility;
- Management Services, utilities, Telecommunications, internet and television charged for separately and in addition to the rent.
Furniture, fittings, plant and apparatus which are not attached to land or a building and which can be removed without damaging the property shall not be treated as real estate for the purpose of Article 55 of the Law.
If the residential real estate is rented furnished or semi-furnished, the entire consideration for the rental shall be treated as a Supply of real estate where no separate charge is made for the use or rental of the furniture, fixtures and fittings.
Sector VAT News Update
Dubai’s Developers hold back passing the VAT impact to buyers for now, reports Gulf News.
Read more here
Impact of VAT on UAE Property, reports Khaleej times.
Read more here
Sector impact analysis is provisional based on the GCC Draft and may change when the country issues the relevant VAT laws.