The Federal Tax Authority (FTA) has announced a new initiative that expands the range of construction-related expenses eligible for VAT refunds for UAE nationals building new residences.
The initiative, which applies to refund claims submitted on or after January 1, 2026, is expected to generate approximately AED 200 million in additional VAT savings for Emirati citizens, with average savings estimated at around AED 25,000 per claim.
According to the FTA, the expanded refund scope now includes several additional residential construction components that were not previously covered. These include staff accommodation for domestic workers, home gyms, game rooms, integrated security and smart home systems, smart doors, swimming pools, fountains, landscaping works, and complete home reconstruction projects involving demolition and rebuilding.
To qualify, these additions must form an integral part of the residential property, be located on the same plot of land, and serve the primary residence of the applicant.
The FTA also confirmed that its digital VAT refund platform has been updated to reflect the newly eligible expense categories and that awareness sessions will be conducted across the UAE to help citizens understand and benefit from the initiative.
The announcement supports the UAE's Year of Family objectives and aims to reduce the financial burden associated with home ownership while improving access to government services.