Dubai’s estate agents push the envelope with VAT absorption

A property brokerage firm in Dubai is absorbing all value-added tax (VAT)-related charges on commissions. This will apply to all residential leases it makes on a building at City Walk, the high-end mixed-use destination on Al Wasl Road, for a limited period — from February 15 to March 15.

In addition, fäm Properties will bear the costs of the 4 per cent Dubai Land Department registration fees for Building 18B — which it has taken on for leasing — for the same period. “While we have welcomed the introduction of VAT to real estate transactions in the UAE to bring much needed transparency to the market, we do understand that such changes are often met with a phase of resistance,” said Firas Al Msaddi, CEO of fäm.

“Our decision to absorb VAT costs on the commission of all transactions in City Walk, as well as waiving the DLD registration fees for 18B, will offer major financial incentives to buyers who are considering investment opportunities at a time when current conditions can yield strong medium to long-term gains.”

Building 18B is a six-storey residential and retail property, comprising one-, two-, three-bedroom apartments and a four-bedroom penthouse on the top floor, with retail space on the ground floor.

To date, fäm Properties has topped Dh1.5 billion in residential property sales at City Walk.

It will be interesting to see whether VAT waiver/absorption will become a more common incentive estate agents start offering in the local property market. If it becomes the case, it will be joint with the other add-ons that they are already deploying, such as waiver of registration fees.

Source:http://gulfnews.com/business/property/dubai-s-estate-agents-push-the-envelope-with-vat-absorption-1.2169837

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