VAT Treatment by Property Type
🏠 Residential (Exempt)
First sale of new residential property within 3 years of completion is zero-rated. Subsequent sales and residential leasing are exempt. No VAT charged but no input VAT recovery.
🏢 Commercial (Taxable)
Commercial property sales, leases, and rentals are standard-rated at 10%. Landlords must charge VAT on rent and can recover input VAT on property costs.
🏗️ New Developments
Developers making zero-rated first sales can recover construction VAT. Mixed-use developments require apportionment between residential and commercial elements.
🏨 Serviced Accommodation
Hotels, serviced apartments, and Airbnb-style rentals are standard-rated at 10%. Tourism levy may also apply separately.
Key Considerations
📋 Capital Goods Scheme
Properties over BD 50,000 are subject to a 10-year capital goods adjustment. Change of use (residential to commercial or vice versa) triggers VAT adjustments.
🏗️ Construction VAT
Contractors charge 10% VAT on construction services. Developers must determine whether the completed property will be zero-rated, exempt, or taxable to plan VAT recovery.
📊 Land Sales
Bare land sales are exempt from VAT. However, land sold with planning permission or as part of a development may be treated differently.