Nationals are permitted to claim VAT refunds on specific expenditures related to constructing their new residences, including fixtures and fittings
The UAE’s Federal Tax Authority (FTA) has expanded the scope of expenses eligible for value-added tax (VAT) refunds for UAE nationals constructing new residences, which will allow them to save approximately Dh25,000 per claim.
The authority said in a statement on Tuesday that this initiative is expected to yield an estimated Dh200 million in VAT savings for UAE nationals, averaging approximately Dh25,000 per claim.
Based on projected claims volume for 2026, the total value of approved refund claims is expected to exceed Dh1 billion, compared to approximately Dh754 million in 2025.
It stated that the initiative is now active and applies to all VAT refund claims for Emirati home construction submitted on or after January 1, 2026, coinciding with the Year of Family, provided all criteria are met.
The FTA added that the digital VAT refund platform has been updated to list categories of eligible expenses as approved by the initiative.
“The FTA’s latest tax relief for UAE nationals aligns with the UAE leadership’s vision to extend comprehensive support to citizens and deliver premium services that ensure their happiness. The initiative reflects integrated national efforts to foster social stability and wellbeing,” said Abdulaziz Al Mulla, Director-General of the FTA.
Conditions
He explained that under the new initiative, UAE citizens are permitted to claim VAT refunds on specific expenditures related to constructing their new residences. This applies to items that form part of the residence, including its fixtures and fittings, provided they are intended for the private use of the citizen or their immediate family. The refunds remain subject to meeting all conditions, procedures, and supporting documentation requirements.
Al Mulla noted that the additional eligible items covered under the initiative include staff quarters for watchmen, drivers, or domestic workers; home gyms and game rooms; and integrated security and smart home systems, along with their built-in components. It also encompasses electronic or smart doors for the main residence and garage, swimming pools, fountains, decorative indoor water features, landscaping, and complete home reconstruction projects, including demolition and rebuilding costs.
To qualify for a refund, these features must form an integral part of the new residential property, be constructed on the same plot of land, and directly serve the primary residence.
Over the coming period, the FTA will host discussion sessions with citizens across the UAE at local district councils to introduce the new initiative, as well as the FTA’s citizen-focused services, and to gather public feedback, observations, and suggestions to drive further development and meet expectations.
