What is the VAT difference between commercial and residential property in the UAE?

Commercial property (offices, shops, warehouses, hotels) is generally subject to UAE VAT at 5% on sale and lease, and a VAT-registered owner using it for taxable business can usually recover input VAT. Residential is treated more favourably: the first supply of a new home within the qualifying period is generally zero-rated, and later sales and leases of existing homes are generally exempt, so occupiers typically pay no VAT. Zero-rating allows input-VAT recovery; exempt supplies do not. Hotels and serviced apartments follow the commercial-style treatment; mixed-use buildings are split between the parts. Confirm each unit's classification with the Federal Tax Authority. Full guide: UAE commercial property VAT. For a portfolio, compare verified UAE legal and tax professionals on LEXAI.