Nationals are eligible to claim VAT refunds on certain expenses incurred in building new homes, including fixtures and fittings.
The UAE’s Federal Tax Authority (FTA) has broadened the range of expenses eligible for VAT refunds for UAE nationals building new homes, enabling savings of around Dh25,000 per claim.
In a statement on Tuesday, the authority said the initiative is expected to generate about Dh200 million in total VAT savings for UAE nationals, with an average benefit of roughly Dh25,000 per claim.
Based on projected claim volumes for 2026, the total value of approved VAT refund claims is expected to surpass Dh1 billion, up from around Dh754 million in 2025.
The initiative is now in effect and applies to all VAT refund claims for Emirati home construction submitted on or after January 1, 2026, aligning with the Year of Family, provided all eligibility requirements are met.
The FTA said the digital VAT refund platform has been updated to include detailed categories of eligible expenses approved under the initiative.
According to Abdulaziz Al Mulla, Director-General of the FTA, the new tax relief for UAE nationals supports the leadership’s vision of providing comprehensive assistance to citizens and enhancing high-quality services aimed at improving wellbeing and happiness. He added that the initiative reflects coordinated national efforts to strengthen social stability and welfare.
Conditions
Under the updated rules, UAE citizens can claim VAT refunds on specific costs related to building new homes, including fixtures and fittings intended for private use by the citizen or their immediate family, subject to all required conditions, procedures, and documentation.
Al Mulla said the expanded list of eligible items includes staff accommodations for watchmen, drivers, and domestic workers, as well as home gyms, game rooms, integrated security and smart home systems, and their built-in components. It also covers smart or electronic doors for the main house and garage, swimming pools, fountains, decorative indoor water features, landscaping, and full reconstruction projects, including demolition and rebuilding expenses.
To qualify, these features must be an integral part of the residence, built on the same plot, and directly serve the primary home.
The FTA will also hold engagement sessions with citizens across the UAE in local district councils to explain the initiative and gather feedback to further improve its citizen-focused services.
