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, 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.

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.