Dubai Q1 real estate transactions rise 10% on the back of government policies

Real estate transactions in Dubai rose an annual 10 per cent during the first quarter on the back of government policies to support the economy in the wake of coronavirus pandemic, according to listings portal Property Finder.

Total property sale transactions during the period ending March 31 reached 10,243, Property Finder said in a statement on Thursday. The month of March alone recorded 3,124 sales transactions worth Dh6.99 billion.

“During the current situation, we have obviously seen a slow down in transactions, however, due to the governments proactive, swift, extreme efforts and policies I believe we will get through this tough period quicker than most," said Lynnette Abad, director of data and research at Property Finder. "The real estate market will start to transact again and will continue the trend where it left off in the first quarter”.

Mortgage registrations during the quarter were consistently higher than 2019 on a weekly basis, according to the report. The month of March had more than 1,209 mortgage registrations, which is the highest number since October 2019 and 24.8 per cent more than March 2019.

Downtown Burj Khalifa, Business Bay, Dubai Marina, Mohammed Bin Rashid City and Jumeirah Village Circle recorded the highest overall property sales transactions during the period.

In off-plan sales, Business Bay, Downtown Burj Khalifa, Mohammed Bin Rashid City, Jumeirah Village Circle and Palm Jumeirah topped the list.

The UAE government announced a number of new initiatives to support the economy in the wake of the coronavirus pandemic.

Last month the Central Bank of the UAE rolled out a Dh100bn economic stimulus, which it increased to Dh256bn. The regulator reduced reserve restrictions on bank deposits and massively expanded its Targeted Economic Support Scheme. In parallel, the UAE government pushed out Dh126bn in fiscal stimulus.

The regulator is providing facilities to banks to help them give customers loan repayment holidays and a reduction in charges.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer