Coinciding with the Year of Family
FTA to expand scope of expenses eligible
for VAT refunds for UAE nationals constructing new residences
UAE, Dubai – 9
June 2026: The Federal Tax Authority
(FTA) has launched
a new initiative to expand the scope of expenses eligible for VAT
refunds for UAE nationals constructing new residences, allowing citizens to
claim refunds on an additional range of construction costs. This move aligns
with the UAE leadership’s directives, coinciding with the Year of Family and
supporting family growth and cohesion.
Expanding the scope of eligible
expenses is expected
to yield an estimated AED
200 million in VAT savings for UAE nationals, averaging
AED 25,000 approximately per claim. This highlights the initiative’s role in supporting home ownership and alleviating the financial burden on families
The initiative is expected to yield tangible financial
benefits for UAE nationals constructing new residences. Based on projected
claims volume for 2026 demand volume, the total value of approved
refund claims is expected to exceed
AED 1 billion, compared to approximately AED 754 million in 2025
Meetings at District
Councils
FTA announced that efforts in the coming period will
focus on raising awareness among UAE citizens regarding the initiative's
benefits and how to utilise them.
Over the coming period, FTA will host discussion sessions
with citizens across the UAE at local district councils to introduce the new
initiative as well as FTA's citizen-focused services, as well as to get public
feedback, obserVATions, and suggestions to drive further development and meet
expectations.
FTA stated that the initiative, now active, applies to
all VAT refund claims for Emirati home construction submitted on or after 1
January 2026, coinciding with the Year of Family, provided all criteria are
met.
FTA added that the digital VAT refund platform has been
updated to list categories of eligible expenses as approved by the initiative.
His Excellency Abdulaziz Al Mulla, Director General of
the FTA, stated: “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.”
His Excellency Al Mulla added: “Coinciding with the Year of Family,
this new initiative ensures
the wellbeing of our citizens by establishing clear and transparent mechanisms
to facilitate VAT refunds for new home construction.”
Additional refund items
His Excellency Abdulaziz Al Mulla 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 a 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.
His Excellency 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.