Dhs200m relief package: FTA expands VAT refund benefits for Emiratis building homes in UAE
The measure is designed to ease financial pressures on families while encouraging family growth, stability and social cohesion
09 June, 2026
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The Federal Tax Authority (FTA) has launched a new initiative that expands the range of construction-related expenses eligible for Value Added Tax (VAT) refunds for UAE nationals building new residences, a move expected to generate significant savings for citizens and support home ownership across the country.
The initiative, which aligns with the UAE leadership’s directives and coincides with the Year of Family, enables Emirati citizens to claim VAT refunds on a broader list of residential construction costs. The measure is designed to ease financial pressures on families while encouraging family growth, stability and social cohesion, a WAM report said.
According to the FTA, the expanded refund scheme is expected to deliver approximately Dhs200m in VAT savings for UAE nationals, with average savings estimated at around Dhs25,000 per claim. Officials said the initiative reinforces the government’s commitment to supporting citizens through practical measures that reduce the costs associated with building family homes.
Refund claims expected to exceed Dhs1bn
The authority expects the initiative to drive a substantial increase in approved refund claims during 2026.
Based on projected demand, the total value of approved VAT refund claims for new home construction is expected to exceed Dhs1bn this year, compared with approximately Dhs754 million recorded in 2025. The increase reflects both the expanded eligibility criteria and anticipated growth in participation among UAE nationals constructing new residences.
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The FTA said it will focus on raising awareness of the initiative in the coming months to ensure citizens understand the additional benefits available to them and the procedures required to access the refunds.
Nationwide awareness campaign planned
As part of its outreach efforts, the authority plans to hold discussion sessions with citizens across the UAE through local district councils.
The sessions will introduce the new initiative, explain the FTA’s citizen-focused services and provide a platform for residents to share feedback, observations and suggestions. The authority said the engagement programme is intended to support the continued enhancement of services and ensure they meet public expectations.
The FTA confirmed that the initiative is already in effect and applies to all VAT refund claims submitted on or after 1st January 2026, provided applicants satisfy all applicable requirements and eligibility criteria.
The authority also noted that its digital VAT refund platform has been updated to reflect the newly approved categories of eligible expenses, making it easier for applicants to identify qualifying costs and submit claims.
Expanded list of eligible expenses
Abdulaziz Al Mulla, director-general of the FTA, said the latest measure reflects the UAE’s broader commitment to supporting citizens and enhancing their quality of life.
“FTA’s latest tax relief for UAE nationals aligns with the UAE leadership’s vision to extend comprehensive support to citizens and deliver premium services that ensure their happiness. The initiative reflects integrated national efforts to foster social stability and wellbeing,” Al Mulla said.
He added: “Coinciding with the Year of Family, this new initiative ensures the wellbeing of our citizens by establishing clear and transparent mechanisms to facilitate VAT refunds for new home construction.”
Al Mulla explained that UAE nationals can now claim VAT refunds on a wider range of expenditures related to constructing new homes, provided the items form part of the residence and are intended for the private use of the citizen or their immediate family. All claims remain subject to the applicable conditions, procedures and documentation requirements.
Newly eligible expenses include staff accommodation for watchmen, drivers and domestic workers, as well as home gyms and game rooms. The expanded scope also covers integrated security systems, smart home technologies and their built-in components.
In addition, electronic and smart doors for residences and garages now qualify for refunds, alongside swimming pools, fountains, decorative indoor water features, landscaping works and complete home reconstruction projects, including demolition and rebuilding costs.
To qualify, the FTA said these features must form an integral part of the residential property, be constructed on the same plot of land and directly serve the primary residence.

























