FTA Broadens VAT Refund for UAE Nationals to Save Dh25,000 Per Claim

UAE nationals could already claim VAT refunds when building a new home, but only on a limited range of expenses. Now the FTA has expanded the scope of expenses eligible for value-added tax (VAT) refunds for UAE nationals. According to this rule, now individuals can save approximately 25,000 Dirhams per claim. On Tuesday, the FTA said this new rule will help UAE citizens save about 200 million Dirhams in VAT when building new homes.  

In 2026, the government expects to pay out over 1 billion Dirhams in VAT refunds for new homes, which is much higher than the 754 million Dirhams paid in 2025.

The new rule is effective since 1st January 2026. This means that it will be applied to all VAT refund claims for Emirati home construction that are submitted on or after 1st January 2026, provided that all requirements are met.

The FTA stated that they have updated their digital VAT refund platform, so you can now see the list of all building costs that can get a VAT refund under the new rule.

Abdulaziz Al Mulla, who is the Director-General of the FTA, stated that this new tax relief effectively supports the UAE leadership’s goal of helping citizens and providing them top quality services. He added that the initiative aims to improve social wellbeing and support family stability across the country.

Conditions for VAT Refunds

UAE citizens can claim a VAT refund on specific expenses incurred in the construction of their new homes, provided the expenses related to the personal use of the citizens or their immediate family members. The expenses permitted for refund include fixtures and fittings, domestic staff accommodation (drivers as well as watchmen), gyms build at home, entertainment rooms, security and smart‑home systems, electronic gates, swimming pools and decorative water features, landscaping, and full rebuilding (demolition and construction).

To get your VAT refund, these features must be a permanent part of your residential property, be constructed on the same land as the main house, and directly serve the main residence.

The authority also made this clear that they will organize discussion sessions with citizens in order to help them understand the new initiative and how it will benefit them. These sessions will take place at local district councils and will provide a great opportunity to citizens to share feedback and suggestions on FTA services.