VAT rebates could have Dubai developers turn more generous

Dubai’s developers are likely to get even more generous with their offers as they compete to reduce the unsold stock on their books. And unlike in other sectors, the introduction of VAT (value added tax) is not going to impact on developer plans.

In fact, VAT could even be a marketing advantage with off-plan launches. “Introduction of VAT is likely to set off more favorable payment plans from developers,” said Faisal Durrani, Cluttons’ Head of Research. “Simply because of the tax rebates available to developers and the fact that VAT kicks in only three years after completion of development.” (As things stand now, residential off-plan sales are believed to be exempt from VAT.) But the fact is that in the last six months or so, developers here have already been quite generous, many of them waiving registration fees, allowing for a lower payment upfront and the bulk of the installments to be made after the handover.

Developers are also stretching the number of years after the handover in which those payments can be made. Two years was the norm and that is slowly inching up to five years and even longer.

Source Credit: Khaleej Times
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