Is the first sale of a new residential building zero-rated in the UAE?

Yes, in principle. Under UAE VAT, the first supply — by sale or lease — of a newly constructed residential building is generally zero-rated when made within the qualifying period set by the VAT legislation and administered by the Federal Tax Authority (FTA). Zero-rating means the developer charges 0% to the first buyer or tenant but, importantly, can still recover the input VAT incurred on construction and related costs. This is what distinguishes zero-rated residential supplies from exempt ones: exempt supplies (later sales and leases of existing homes) carry no recovery right. To rely on zero-rating, the building must meet the legal definition of residential, the supply must be the genuine first supply, and it must fall within the prescribed time window. Keep construction invoices, completion certificates and sale documents to support recovery claims, because the FTA can review them. Because the qualifying period and "first supply" tests are technical and time-sensitive, confirm your position with the FTA, and for a development you can compare verified UAE legal and tax professionals on LEXAI to protect your input-tax recovery.