The UAE Federal Tax Authority has introduced a new initiative that significantly broadens the scope of construction-related expenses eligible for Value Added Tax refunds for UAE nationals building new homes.
This development aims to alleviate financial burdens on citizens and promote home ownership, coinciding with the Year of Family and reflecting the UAE leadership’s directives.
The expanded refund scheme is projected to yield around Dhs 200M in VAT savings for Emirati citizens, with individual claims expected to average Dhs 25,000. Officials have indicated that this initiative underscores the government’s dedication to practical measures that lower the costs associated with constructing family homes.
Anticipated demand suggests that approved VAT refund claims for new home construction may surpass Dhs 1B in 2026: a substantial increase from Dhs 754M in FY25, driven by wider eligibility criteria and heightened engagement from UAE nationals.
The authority confirmed that the initiative is effective for all VAT refund claims submitted on or after 1 January, 2026, provided that applicants meet the necessary eligibility requirements.
The digital VAT refund platform has been updated to include the new categories of eligible expenses, simplifying the claims process for applicants.
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