The UAE Federal Tax Authority has broadened the scope of construction-related expenses eligible for VAT refunds for UAE nationals building new homes, in an initiative effective for all claims submitted from 1 January 2026.
The expanded scheme is projected to generate approximately AED 200 million in VAT savings for Emirati citizens, with individual refund claims expected to average AED 25,000. Total approved VAT refund claims for new home construction are anticipated to surpass AED 1 billion in 2026, a significant increase from AED 754 million in FY25, driven by the wider eligibility criteria and heightened participation from UAE nationals.
The FTA has updated its digital VAT refund platform to incorporate the newly eligible expense categories, streamlining the claims process for applicants. The initiative coincides with the UAE's Year of Family and reflects the government's focus on reducing the financial burden of constructing family homes for Emirati citizens.
Gulf Economist Staff Writer