VAT Refund for UAE Nationals on Building New Residences in UAE
Up until June 2025, the Federal Tax Authority (FTA) has received and approved over 38,000 New Residences VAT refund applications and issued refunds of over AED 3.2 billion.[1]
This is effectively a 25% increase from last year, evidence that thousands of Emiratis are recovering VAT successfully as they turn building sites into homes.
The VAT refund scheme for homebuilders is not simply an economic relief program. It is a deliberate government program to help UAE nationals acquire their own homes, encourage long-term investment in residential complexes, and counter the effect of increasing construction costs.
For families and individuals planning to build their dream house, this scheme ensures that they receive back value-added tax on vital building expenses as long as the project meets official specifications. In essence, it translates into you having more money in your pocket, available to spend on building a better and more comfortable home.
VAT Refund for New Residences Scheme
Simultaneously with VAT implementation in the UAE in 2018, the New Residences VAT Refund scheme was developed with one very specific goal in mind: not to have Emirati nationals out of pocket with extra tax while they construct their own residences.
In a gist, it permits UAE nationals to recover the VAT charged on eligible building expenses, including cement, tiles, wiring, plumbing, and consultancy fees from architects or engineers. Crucially, this scheme applies solely to private residences - for personal or domestic purposes, and not to commercial property or mixed-use property.
Year by year, the plan has grown incrementally in scope and influence. The FTA now also made it easy to submit applications via its EmaraTax portal and Maskan app, where nationals can upload certificates, invoices, and contracts straight from their computers.
Who Does It Apply To?
The VAT refund scheme applies to UAE nationals constructing a new private house for their own use. It does not cover commercial and mixed-use buildings.
The move prevents Emirati residents from being economically penalized for investing in housing schemes that serve the national housing objectives.
Eligibility Criteria for VAT Refunds
The criteria are simple but detailed. As an applicant, you should be:
- A UAE national with a recent Family Book.
- The building scheme should be a new home property intended solely for private use.
- The house should have regular facilities for living such as a kitchen, bathroom, and bedrooms.
Now, there are certain things which this scheme applies to, and those are qualifying expenses, and also does not apply: those are non-qualifying expenses.
Qualifying Expenses
This rebate is for:
- Bricks, cement, tiles, wiring, fitted cupboards, plumbing, sanitary units, and flooring that are building materials.
- Professional charges by architects, engineers, contractors, and consultants.
It would be advisable to know these categories in advance so that you are not in any confusion, and, more importantly, so that claims under the scheme are handled more easily.
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How To Apply For the VAT Refund for UAE Nationals on Building New Residences in UAE?
Application for VAT refund is a clearly outlined process conducted via the FTA's EmaraTax portal and Maskan app:
Step 1:
Register on the FTA e-Services platform for an EmaraTax account. Next, go to the "Special Refunds" and then select ‘New Residences VAT Refund’.
Step 2:
You will be required to upload the following documents:
- Emirates ID and your Family Book
- Building Completion Certificate or proof of occupation.
- Ownership documents and architectural drawings.
- Tax invoices, building contracts and/or consultant contracts, and proof(s) of payment.
Step 3:
Once you submit your application, wait for verification by the FTA. You will also receive a reference number for your application; also, in some cases, a verification body may also request additional information or original documents from you.
[Note: Applications usually need to be submitted within 12 months from the date of occupation or issuance of Completion Certificate. Also, ensure that you do not submit incomplete applications, as re-doing the process will cause further delay.]
Role of CDA in Building your Dream Home in UAE
By refunding the tax on basic building materials and services, the FTA has given UAE nationals a direct incentive to invest in their own properties with confidence. With hundreds of families benefitted, this scheme has now become both a financial assistance initiative, and a pillar of the UAE's social and housing policy.
But while the process is well established, getting through - document preparation, compliance requirements, deadlines, etc can still be intimidating. That is where Charles and Darwish Associates (CDA) step in; as UAE tax law specialists and refund application professionals, CDA ensures that your claim is processed speedily and accurately.
Our team of tax experts assist you in getting all the documents sorted and in applying for the VAT refunds without any errors thereby enabling you to get the refunds without any delay. If you are planning to build a home feel free to connect our professionals who are always on stand-by to assist you with VAT related concerns.
References:
Mitesh Maithia
Tax Manager
Mitesh is a Tax Professional with expertise in direct, indirect, and international taxation, including transfer pricing, since 2018. Passionate about making complex tax matters simple, he shares insights to help businesses stay compliant and forward-looking.
