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Do I charge VAT on a short-term holiday home rental in the UAE?

Asked by Anonymous·Jun 26, 2026·1 answers
A property owner letting a furnished apartment to tourists short-term wants to know if it is taxed like residential rent or like a hotel.

This answer is AI-generated by LEXAI. It is general legal information, not legal advice — verify anything you act on with a licensed UAE lawyer. How LEXAI uses AI

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AI-generated answer

Jun 26, 2026
Short-term and serviced accommodation is generally not treated as ordinary residential leasing for UAE VAT. While leasing an existing residential home is usually exempt, hotel accommodation, serviced apartments and similar short-term, hospitality-style lettings are typically taxable at the standard rate of 5%. The distinction turns on the nature of the supply — a genuine residential tenancy versus a hotel-like service with furnishings and services — rather than just the type of building. That means a holiday-home or serviced-apartment operator may need to register for VAT once turnover reaches the Federal Tax Authority's (FTA) registration thresholds, charge 5% on the nightly or short-stay rate, and account for it through VAT returns, while also being able to recover related input VAT. Because the line between exempt residential rent and taxable hospitality supply depends on the facts, do not assume your short-term let is exempt. Confirm the correct classification and your registration position with the FTA, and if you run short-term rentals as a business you can compare verified UAE legal and tax professionals on LEXAI to get the treatment right.
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