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VAT on Property Transactions

Residential, commercial, lease, sale โ€” VAT treatment varies dramatically.

PROPERTYMarch 2026 ยท 9 min read

Property VAT Matrix

Transaction Residential Commercial
First sale (new build) Zero-rated 10%
Subsequent sale Exempt 10%
Lease/rent Exempt 10%
Bare land Exempt Exempt
Construction services 10% (input) 10% (input)

๐Ÿ—๏ธ Developer Impact

Residential developers face a cash flow challenge: construction inputs are standard-rated (10% VAT paid), but the first sale is zero-rated (no VAT collected). This means developers are in a refund position โ€” they can claim back all construction VAT. However, NBR refund processing takes time, so cash flow planning is essential.

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