The Federal Tax Authority has launched an expanded VAT refund initiative for UAE nationals building new homes, broadening the range of eligible construction expenses in a move aimed at supporting families and reducing the cost of home ownership across the emirates.
Under the updated rules, which apply to all refund applications submitted on or after January 1, 2026, UAE citizens can now claim VAT refunds on a significantly wider range of construction-related expenses. Newly eligible items include staff accommodation for domestic workers, home gyms, game rooms, integrated smart home systems, security systems, electronic and smart doors, swimming pools, fountains, decorative water features, landscaping works, and complete home reconstruction projects including demolition and rebuilding costs.
The FTA estimates the expanded programme will generate approximately Dh200 million in VAT savings for Emirati citizens, with the average refund estimated at about Dh25,000 per claim. The total value of approved refund claims is expected to exceed Dh1 billion in 2026, compared with around Dh754 million recorded in 2025, reflecting the broader scope of eligible expenses.
The authority said all qualifying features must be part of the residential property, built on the same plot of land, and directly connected to the main residence to qualify for a refund. The initiative aligns with the UAE leadership’s directives and coincides with the Year of Family, reinforcing government efforts to support home ownership and family wellbeing.
The FTA also confirmed its digital VAT refund platform has been updated to include the newly approved categories, making it easier for applicants to identify eligible expenses and submit claims. The authority said it will organise awareness sessions at local district councils across the UAE to help citizens understand the new initiative and how to benefit from it, while also providing an opportunity for residents to share feedback on FTA services.
FTA Director-General Abdulaziz Al Mulla said the initiative reflects the UAE leadership’s commitment to supporting citizens and providing services that improve quality of life, while making the refund process more transparent and accessible for nationals constructing new homes.
