UAE Expands VAT Refunds for Citizens Building New Homes in 2026

  • Publish date: Tuesday، 09 June 2026 Reading time: two min read

Expanded VAT Refund Scheme Eases Construction Costs for UAE Nationals Building Family Homes

The Federal Tax Authority (FTA) has unveiled a significant expansion to its Value-Added Tax (VAT) refund scheme for UAE nationals constructing new homes, a move designed to lower construction costs and reinforce the leadership's commitment to family welfare during the Year of Family.

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Under the new initiative, which took effect on January 1, 2026, the scope of eligible expenses for refunds has been broadened to include a wider array of construction-related items intended for personal or family use within a residential property.

A Boost to Home Ownership

The FTA estimates that this expanded list of qualifying expenses will generate approximately AED 200 million in VAT savings for Emirati citizens. The average refund per claim is projected to be around AED 25,000. Consequently, the total value of approved refund claims for 2026 is expected to surpass AED 1 billion, a notable increase from the AED 754 million recorded in 2025.

Abdulaziz Al Mulla, Director-General of the FTA, stated that the initiative reflects the nation's dedication to improving citizens' quality of life. "The expanded refund programme aims to make the process more transparent and easier for UAE nationals constructing new homes," Al Mulla said. He noted that the digital VAT refund platform has already been updated to include these new categories, streamlining the identification of eligible expenses and claim submission.

New Eligible Categories

Previously limited to core structural elements, the refund eligibility now covers several premium and auxiliary features, provided they are built on the same plot of land and directly connected to the main residence. Newly included expenses encompass:

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  • Staff Accommodation: Costs related to housing for watchmen, drivers, and domestic workers.
  • Recreational Facilities: Home gyms, game rooms, swimming pools, fountains, and decorative indoor water features.
  • Smart & Security Systems: Integrated smart home technology, security systems, and electronic or smart doors for both homes and garages.
  • Landscaping: External landscaping works.
  • Reconstruction: Complete home reconstruction projects, including demolition and rebuilding costs.

Awareness Campaign Launch

To ensure citizens are fully aware of their rights under the new rules, the FTA plans to launch an awareness campaign across the UAE. These sessions, hosted at local district councils, will educate applicants on how to maximize their benefits while also providing a forum for residents to offer feedback on FTA services.

The initiative underscores the government's strategy to support home ownership as a cornerstone of family stability, offering tangible financial relief to families investing in their future residences.