VAT for Property Management Entities in Dubai

Introduction

Dubai always grows fast with real estate investment and new business. Many people buy and sell properties every day. Property owners feel relaxed when property management entities handle their real estate work. These management companies help keep things organized. They take care of everything from rent collection to building maintenance. The government in Dubai makes strict VAT rules for these companies. The Federal Tax Authority (FTA) also explains these rules clearly to help everyone follow the law.

What Laws Govern Property Management Entities in Dubai?

Dubai has Law No. 6 of 2019, which tells everyone how to own and manage real estate together. This law gives property management companies and owners’ associations special rights and responsibilities. The law also explains how VAT affects these groups. The FTA says every company must check if their service is taxable. If it is, they must follow VAT rules. Mubarak Al Ketbi (MAK) Auditing helps you understand your rights under this law.

What Happened to Owners’ Associations and VAT Registration?

Law No. 6 of 2019 changed things for owners’ associations. The law moved all rights and duties of owners’ associations to property management entities. After that, owners’ associations were not making taxable supplies anymore. Any owners’ association that registered for VAT had to cancel their VAT registration before December 2019. This rule also covered properties in Dubai free zones. Now, property management companies handle most VAT matters for joint properties.

What Is a Property Management Entity Under UAE Law?

Property management entities are companies or groups that take care of shared facilities in joint properties. These can be big developers or special management firms hired by the property owners. The management entity looks after everything, including:

Maintenance of common areas
Cleaning of buildings
Security services
Collecting service charges from owners

They collect money from unit owners to cover costs. In return, they provide many management services. Every property management company must keep records of the services it provides.

Does a Property Management Entity Need VAT Registration?

Yes. The law says property management companies provide taxable services. If their income goes over the VAT registration limit, they must register for VAT. In the UAE, the standard VAT rate is 5%. If your property management company collects service fees above the registration threshold, you must get a VAT number.

Bullet Points: When VAT Registration is Needed

Company provides taxable management services
Total taxable supplies go over the registration threshold
Company must collect and pay 5% VAT on services

What Are the Main VAT Obligations for Property Management Entities?

Every VAT-registered property management entity must:

Issue valid tax invoices for every service
Use the correct invoice format under UAE law
File VAT returns on time with the FTA
Report all service income correctly in VAT returns
Claim input VAT for eligible business expenses

If you miss these steps, you could face fines or lose your good standing. Always keep good records and check that your team follows every VAT rule.

Other Important VAT Duties for Property Management Firms

Keep all receipts and invoices for seven years
Train your team on VAT laws and updates
Stay alert for any changes in VAT regulations from FTA
Review contracts regularly to stay compliant

How Mubarak Al Ketbi (MAK) Auditing Can Help

When it comes to VAT on property management, don’t let the grass grow under your feet! Mubarak Al Ketbi (MAK) Auditing has a team ready to guide you with everything from VAT registration to reporting. Our experts check your records, answer your questions, and help you keep your business running smoothly under UAE law.