UAE: Guidance on valuation method under transitional rules for disposal of qualifying immovable property by real estate developers
Key takeaways from Corporate Tax Public Clarification No. 009
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October 23, 2025
The Federal Tax Authority (FTA) in September 2025 released Corporate Tax Public Clarification No. 009 (CTP009) clarifying the valuation method under the transitional rules outlined in Ministerial Decision No. 120 of 2023 (MD 120) for the disposal of qualifying immovable property (QIP) by real estate developers. While there are two methods for calculating the gain attributable to the pre-corporate tax ownership period (i.e., the valuation method and the time apportionment method), CTP009 covers the valuation method only.
Key takeaways from the guidance include the following:
- Real estate developers can apply the transitional rules on an entire developmental project instead of unit-by-unit basis.
- Transitional relief needs to be carried forward to future years based on the percentage of completion expected in upcoming periods.
- Market valuation must be determined by the relevant government authorities in the UAE or by third parties authorized by these authorities. Valuations performed by unauthorized or unqualified agents will not be valid for the purposes of applying the transitional rules relief.
- Market valuation must be adjusted for immovable property that will not be disposed of to customers or that is not part of the QIP.
Read an October 2025 report prepared by the KPMG member firm in the UAE