The VAT in the real estate sector is applicable only for commercial properties. All commercial property transactions, sales and leases alike are subjected to 5% VAT. Residential properties are exempt by law for the time being to offset additional amount to the irrecoverable cost paid by the buyers upon acquiring a new property. Real estate developers are zero-rated for a period of three years of residential property construction. It will allow securing the market on the residential side. Zero-rated goods and services are VAT taxable but the actual tax charges are zero.