Accounting built around leases, service charges and recoverable VAT
Residential, commercial and mixed-use portfolios — every supply on the right treatment, and every dirham of input tax you are actually entitled to.
- Treatment set per unit
- Input tax apportioned properly
Residential
Commercial
500+ Businesses
Supported across the UAE
Landlords & Developers
One unit or a whole portfolio
Mixed-use buildings
Treatment split floor by floor
Dedicated Advisor
One person who knows your buildings
Three things that break a property owner’s books
Not general accounting with rent bolted on. These are the places landlords and developers actually lose money and fail reviews.
One building, several tax worlds
A mixed-use tower is not one supply. The retail on the ground floor is standard-rated, the apartments above it are exempt, and the service charge has to be split the same way. Bill it as one line and the whole building is wrong.
Exempt income that costs you twice
An exempt supply carries no VAT out — and it also blocks the VAT on everything spent to earn it: maintenance, agency fees, legal, management. Claim it all back and the correction arrives with the return, not before it.
A three-year clock nobody watches
The first supply of a new residential building is zero-rated only within three years of completion. After that the same sale or lease is exempt — and the construction VAT already recovered is a question you have to be able to answer.
What the VAT actually is, door by door
The same portfolio can contain all six of these at once. The third column is the one that decides what a building really costs you.
Residential — first supply
Sale or lease, within three years of completion
Recoverable — including the VAT on building it
Residential — any later supply
Every sale or lease after the first
Not recoverable — maintenance and fees are a real cost
Short-term residential let
Under six months, to non-residents — treated as commercial
Recoverable
Commercial property
Offices, retail, warehousing — sale or lease
Recoverable
Bare land
Nothing built on it and nothing under way
Not recoverable
Covered land
The same plot, once construction has begun
Recoverable — from the point it changes
On a periodic lease of bare land, the tenant has to tell the landlord when the land becomes covered — the treatment then changes for the rest of the lease. It is the change nobody remembers to make.
“Property rarely gets the VAT wrong on the big sale. It gets it wrong on the service charge — quietly, every quarter, for years.”
Ripple Accounting · DubaiWhy exempt income costs you twice
A tower with shops below and apartments above. Forty per cent of its income is commercial, sixty per cent is residential lease. Here is what that does to the VAT.
- 40% commercial — standard-rated
- 60% residential lease — exempt
Output VAT is charged on the commercial forty per cent. Nothing is charged on the residential sixty — which is why owners assume the exempt half is simply neutral.
- AED 40,000 recoverable
- AED 60,000 blocked — a real cost
Recovery follows the taxable share of what you supply. The sixty per cent attributable to exempt income is not deferred and not refundable later — it is simply an expense of running the building.
The apportionment has to be done on one method, applied consistently — and a special method needs the FTA’s approval before you use it. Most of the corrections we see are not a wrong rate on a big transaction; they are a portfolio recovering input tax as though none of its income were exempt.
A worked example on a stated 40/60 split, not a quote. Your own apportionment depends on your actual mix of supplies and the method agreed for it.
The whole portfolio, from the tenancy contract to the filed return
Lease and tenancy schedules
Every contract recorded with its start, its end, its rent-free period and its treatment — so income is recognised over the term rather than whenever a cheque clears.
Service charges and owners’ associations
Budgets, collections and reserve funds kept straight, and the charge split between the exempt and standard-rated parts of a mixed-use building instead of billed as one line.
Input tax apportionment
One documented method for recovery across a mixed portfolio, applied the same way every period — and the paperwork behind it if the FTA ever asks how the figure was built.
Property-by-property P&L
Each building read on the same basis, with its own yield, arrears and cost base — so a weak asset shows up as a weak asset and not as a bad month across the portfolio.
Sales, transfers and the three-year window
Completion dates tracked against the zero-rating window, so a first supply is treated as one while it still is — and the construction input tax already claimed stays defensible.
VAT and Corporate Tax
Returns filed inside the 28-day window on treatments you can point to a rule for, and Corporate Tax at 9% above AED 375,000 calculated on records that stand up to a question.
Four steps, then it runs
Portfolio review
We go through every property and every lease you hold, and how each one is being treated today.
Set the treatment map
One written record of what each unit is, what its supply is, and how its input tax is apportioned — so nobody has to decide it again each quarter.
Monthly close by property
Rent, arrears, service charges and recoverable VAT reconciled per building, with the contracts filed against the entries.
Returns and reporting
VAT filed inside the 28-day window, and a per-property view of yield and cost you can act on.
Common questions from UAE property owners
Do I charge VAT on residential rent?+
Almost never. The first supply of a new residential building — sale or lease — is zero-rated if it happens within three years of completion. Every supply after that is exempt, so no VAT is charged. The exception that catches people out is a short-term let to non-residents: under six months is treated as a commercial supply and carries 5%.
My building is shops downstairs and apartments upstairs. What do I do with the service charge?+
Split it. In a purely residential building the service charge follows the exempt treatment; in a mixed-use building it has to be apportioned between the exempt residential part and the standard-rated commercial part. Charging one blended rate to every unit is the most common error we correct in this sector, and it repeats every quarter until somebody fixes the basis.
Why can I not claim back the VAT on my building’s maintenance?+
Because input tax follows the supply it relates to. Costs incurred to earn exempt income — residential lease income, in most portfolios — carry VAT you cannot recover. Where a building earns both, recovery is apportioned to the taxable share, on one method used consistently. A special method needs the FTA’s approval before you rely on it.
I bought land. Is that exempt?+
If it is bare land, yes. Once the land is covered — construction has begun on it — the supply is standard-rated at 5%. On a periodic lease this can change mid-term: the tenant has to notify the landlord when the land becomes covered, and the treatment changes for the remainder of the lease. That notification is the step almost nobody makes.
When does a landlord have to register for VAT?+
Registration is mandatory once taxable supplies pass AED 375,000 in the previous twelve months, and voluntary from AED 187,500. Exempt residential rent does not count towards the threshold — which is why a landlord with one commercial unit can be liable to register while a landlord with a whole residential block is not.
Talk to someone who has seen your books before
Thirty minutes, a look at how your leases, service charges and input tax are recorded, and an honest view of what is missing.
- Free first consultation
- No obligation
- Response within 24 hours