Statutory and project audits
Annual audits for developers, contractors and property companies, plus project-level reporting support.
Real Estate and Construction Accounting, Audit and Tax in Dubai and the UAE
Real estate and construction businesses in the UAE face specific rules: off-plan sales in Dubai go through project escrow accounts, contract revenue follows IFRS 15, residential and commercial property have different VAT treatments, and brokers have AML duties. SGA World provides audit, accounting, VAT and corporate tax for developers, brokers, landlords and contractors.
- Ministry of Economy and Tourism approved auditor
- 500+ clients
- Dubai & Abu Dhabi
Real estate and construction at a glance
- Developers
- Escrow accounts and IFRS 15 revenue
- Contractors
- Progress billing, retentions, variations
- VAT
- Residential vs commercial treatment
- Brokers
- AML duties and goAML reports
- Landlords
- Rental income and corporate tax
Real estate and construction is one of the UAE's largest sectors, and one of the most complex to account for. Real estate and construction accounting has to deal with off-plan sales and escrow accounts, long contracts with progress billing and retentions, different VAT treatments for residential and commercial property, AML duties for brokers and, since 2023, corporate tax on property income and gains.
SGA World provides audit, accounting, VAT and corporate tax services for developers, contractors, brokers, property managers and landlords across Dubai and Abu Dhabi. As auditors, we focus on the judgements that move the numbers: revenue timing, project costs, provisions and property values.
- Off-plan sales in Dubai use project escrow accounts
- Escrow
- Revenue on sales and contracts over time or at a point
- IFRS 15
- Residential, commercial and land treated differently
- VAT
- Brokers are DNFBPs with goAML duties
- AML
At a glance
Real Estate and Construction Accounting and Audit: Key Points
- Developers: off-plan projects in Dubai require an escrow account under Law No. 8 of 2007, with an auditor-certified project cost and revenue estimate.
- Revenue: property sales and construction contracts follow IFRS 15, often recognised over time as work progresses.
- VAT: the first supply of new residential property within three years of completion is zero-rated; later residential sales and leases are generally exempt; commercial property is taxed at 5%.
- Corporate tax: property companies are taxed on profits; individuals investing in property without a licence are generally outside corporate tax.
- AML: real estate brokers must run an AML programme and file REAR reports for cash and virtual asset payments above the threshold.
- Contractors: retentions, variations, claims and liquidated damages need careful estimates and audit evidence.
Our services
Which Services Do We Provide for Real Estate and Construction Companies?
Developer accounting
Project cost tracking, IFRS 15 revenue, escrow reconciliations and capitalised costs.
Contract accounting
Progress billing, retentions, variations and cost-to-complete reviews.
Property VAT
Residential, commercial and mixed-use VAT, apportionment and input tax recovery.
Corporate tax
Property gains, CTP009 valuation choices, interest limits and returns.
Broker AML
goAML registration, risk assessment, KYC and REAR reporting.
Key rules
Which UAE Rules Matter Most for Real Estate and Construction?
| Area | Rule | What it means for you |
|---|---|---|
| Off-plan sales (Dubai) | Law No. 8 of 2007 on escrow accounts | Buyer payments go into a project escrow account; release follows the rules and progress. |
| Revenue | IFRS 15 | Sales and contracts may be recognised over time if conditions are met. |
| Residential VAT | First supply within 3 years: zero-rated; later: exempt | Input VAT recovery depends on the type of supply. |
| Commercial VAT | 5% on sales and leases | Input VAT generally recoverable. |
| Corporate tax | 9% above AED 375,000 for companies | Property gains, interest and valuation elections need planning. |
| AML | Brokers are DNFBPs | KYC, goAML registration and REAR reports. |
How we work
How Do We Work With Real Estate and Construction Clients?
Step01
Understand the projects
Map projects, contracts, escrow accounts and financing.
Step02
Set up project accounting
Cost codes, budgets and revenue methods per project.
Step03
Review judgements
Cost to complete, revenue timing, provisions and impairment.
Step04
Audit and report
Audited accounts and support for lenders, regulators and buyers.
Step05
Tax
VAT returns, apportionment and the corporate tax return.
Why SGA World
Why Choose SGA World for Real Estate and Construction Accounting and Audit?
Project-level understanding
We read contracts, cost reports and escrow statements, not just the trial balance.
Ministry-approved audit firm
SGA World is a Ministry of Economy and Tourism approved audit firm, so our reports are accepted where it matters.
Audit and tax in one team
Auditors, VAT, corporate tax and transfer pricing specialists work together, so nothing falls between advisers.
Qualified chartered accountants
A team of chartered accountants qualified in India and the UK, focused on UAE rules.
500+ clients
Mainland and free zone companies, from start-ups and SMEs to regional groups.
Listed with major UAE banks
Our audit work is recognised by major UAE banks for facilities and account reviews.
VAT
How Does VAT Apply to UAE Property?
- New residential property: the first supply by sale or lease within three years of completion is zero-rated, so developers can recover input VAT.
- Later residential supplies: subsequent sales and residential leases are generally exempt, so related input VAT is not recoverable.
- Commercial property: sales and leases are taxed at 5%, with input VAT recoverable.
- Bare land: supplies of bare land are generally exempt.
- Mixed-use buildings: input VAT has to be apportioned between taxable and exempt use.
Getting the classification right on every unit and lease avoids large VAT errors.
Corporate tax
How Does Corporate Tax Affect Property Businesses?
Developers, contractors and property-holding companies pay corporate tax on profits at 9% above AED 375,000. Key issues include:
- gains on property and the choice of valuation basis for property held before corporate tax; see our CTP009 article;
- interest deductions, which are limited where net interest exceeds AED 12 million;
- related-party sales and loans within property groups, at arm's length;
- individuals who invest in property without a licence are generally not subject to corporate tax on that income.
Worked example
Example: An Off-Plan Developer's Year End
A Dubai developer is building a 120-unit residential tower, with 80 units sold off-plan.
- Escrow: buyer payments sit in the project escrow account; the books reconcile escrow balances, releases and buyer receivables.
- Revenue: under IFRS 15, revenue on sold units is recognised over time using costs incurred against the total budget, so a reliable cost-to-complete is essential.
- VAT: first sales of the residential units are zero-rated, so input VAT on construction is recoverable.
- Corporate tax: profit recognised under IFRS 15 is the starting point for the tax return.
If the cost-to-complete is understated, profit is overstated across the whole project. That is why we test budgets against contracts and progress reports.
What to prepare
What Do We Need for a Real Estate or Construction Audit?
Projects
Project budgets, cost reports, progress certificates and cost-to-complete.
Sales
Sale and purchase agreements, payment plans and buyer ledgers.
Escrow
Escrow account statements and release records.
Contracts
Main contracts, subcontracts, variations and retentions.
Financing
Loan agreements and interest calculations.
Tax
VAT returns, unit classification and corporate tax workings.
Fees and timing
What Affects the Cost and Timing of Real Estate Audits?
Fees depend on the number of projects, units and contracts, escrow accounts, the reliability of cost-to-complete estimates and whether VAT and corporate tax work is included. A single-project developer or mid-size contractor typically needs two to four weeks of fieldwork. We agree a fixed fee after reviewing your projects.
Avoid problems
Common Mistakes in Real Estate and Construction Accounts
Recognising all revenue at handover by default
May conflict with IFRS 15 over-time rules
Out-of-date cost-to-complete
Overstated profit
Charging 5% VAT on a first residential sale
Should usually be zero-rated
Recovering input VAT on exempt residential leases
VAT assessments
Ignoring retentions and claims
Misstated receivables and payables
Brokers without AML procedures
Fines and goAML failures
Talk to us
Get Real Estate and Construction Accounts You Can Rely On
Tell us about your business and what you need. We will propose a clear scope and a fixed fee.
We handle
- Developer and contractor audits
- Project and contract accounting
- Property VAT
- Corporate tax
- Broker AML
Location: Dubai & Abu Dhabi
Talk to Our Team
Our offices in Business Bay, Dubai and Al Bateen, Abu Dhabi support clients across the UAE.
Dubai
Office 1923, The Exchange Tower, Business Bay, Dubai
Abu Dhabi
Khalidiya Towers M-B6, W10, Al Bateen, Al Khalidiyah, Abu Dhabi
Talk to an auditor
Tell us your company type, jurisdiction and deadline. We will confirm the scope, timeline and fee.
- WhatsApp us+971 50 627 3556
- Call us+971 4 570 1795
- Email us[email protected]
- Book an appointmentChoose a time that suits you
Prefer a form? Send us a detailed enquiry.
Who prepared this page
Written and reviewed by SGA World's audit and tax team
This guide is prepared by chartered accountants at SGA World Auditing Accounting L.L.C S.P.C in Business Bay, Dubai, a Ministry of Economy and Tourism approved audit firm, and checked against Federal Tax Authority legislation and guidance. It is reviewed whenever the rules change.
- Last reviewed 14 October 2026
- Chartered accountants from India and the UK
- FTA representation through Saif Chartered Accountants
Have a question about your company?
Tell us your activity, jurisdiction and deadline. A chartered accountant will reply.
Ask an expertFrequently asked questions
Real Estate and Construction Accounting and Audit – FAQs
Short answers to the questions UAE businesses ask us most. Still unsure?
Talk to our team01.What VAT applies to the sale of a new apartment?
The first supply of a new residential property within three years of completion is generally zero-rated. Later residential sales are generally exempt.
02.Is commercial rent subject to VAT?
Yes. Leases of commercial property are generally taxed at 5%.
03.Do individuals pay corporate tax on rental income?
Individuals earning rental income from property investment without a business licence are generally outside UAE corporate tax.
04.What is an escrow account for off-plan projects?
A dedicated project account required in Dubai under Law No. 8 of 2007, into which off-plan buyer payments are deposited and from which funds are released under the rules.
05.How do developers recognise revenue?
Under IFRS 15, often over time as construction progresses, if the contract conditions are met; otherwise at handover.
06.What are retentions in construction?
Amounts held back from progress payments until completion or the end of the defects period; they must be tracked as receivables or payables.
07.Do real estate brokers need AML compliance?
Yes. Real estate brokers are DNFBPs and must register on goAML, run KYC and file reports such as REARs where required.
08.Can input VAT on a residential building be recovered?
Input VAT linked to zero-rated first supplies can be recovered; input VAT linked to exempt supplies cannot.
09.How is a mixed-use building treated for VAT?
Input VAT is apportioned between taxable commercial use and exempt residential use.
10.Is interest on development loans fully deductible?
Net interest above AED 12 million is limited to 30% of tax EBITDA under the general interest limitation rule.
11.How long does a construction company audit take?
Typically two to four weeks of fieldwork, depending on projects and contracts.
12.Which services does SGA World provide to real estate companies?
Audits, project and contract accounting, property VAT, corporate tax and AML support for brokers.
References:Dubai Law No. 8 of 2007 on escrow accounts · Dubai Land Department · Federal Tax Authority · UAE Ministry of Finance — reviewed 14 October 2026
