The Federal Tax Authority (FTA) launched a new initiative on June 9, 2026, that significantly broadens the range of construction expenses eligible for value-added tax refunds for UAE nationals building new homes, as the government reinforces support for family wellbeing during the Year of Family.
The expanded scheme is expected to generate approximately Dh200 million in VAT savings for Emirati citizens, with the average refund estimated at about Dh25,000 per claim. The authority projects total approved refund claims will exceed Dh1 billion in 2026, compared to around Dh754 million recorded in 2025.
Abdulaziz Al Mulla, Director-General of the FTA, said the initiative reflects the UAE leadership’s commitment to supporting citizens and providing services that improve their quality of life. He added that the expanded refund programme aims to make the process more transparent and easier for UAE nationals constructing new homes.
Newly Eligible Construction Costs
Under the updated rules, which apply to all VAT refund applications submitted on or after January 1, 2026, UAE nationals can now claim refunds on a significantly wider range of construction-related expenses that form part of the residence and are intended for personal or family use.
Newly eligible items include:
- Staff accommodation for watchmen, drivers and domestic workers
- Home gyms and game rooms
- Integrated smart home systems and security systems
- Electronic and smart doors for homes and garages
- Swimming pools and fountains
- Decorative indoor water features
- Landscaping works
- Complete home reconstruction projects, including demolition and rebuilding costs
The FTA specified that these features must be part of the residential property, built on the same plot of land and directly connected to the main residence in order to qualify for a refund.
Digital Platform and Awareness Campaign
The authority confirmed that 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 their claims.
The FTA will organise awareness sessions across the UAE to help citizens understand the new initiative and how to benefit from it. These sessions will be held at local district councils and will also provide an opportunity for residents to share feedback and suggestions on FTA services.
Officials said the initiative is expected to provide meaningful financial support to families while encouraging home ownership and helping reduce the overall cost of building a new residence.
The move comes as the UAE continues to strengthen policies supporting citizen welfare and property market growth, with the country recently securing its position as the world’s most attractive real estate investment destination.