UAE nationals to get AED25,000 in VAT savings on new homes

The expense eligibility on VAT refunds on the costs of constructing new homes for UAE nationals has been expanded under a new initiative by the Federal Tax Authority (FTA), with AED 25,000 set for each claim.

Expanding the scope of eligible expenses is expected to yield an estimated AED 200 million in VAT savings for UAE nationals, averaging AED 25,000 approximately per claim.

Based on projected claims volume for 2026 demand volume, the total value of approved refund claims is expected to exceed AED 1 billion, compared to approximately AED 754 million in 2025.

FTA said the initiative, now active, applies to all VAT refund claims for Emirati home construction submitted on or after January 1, 2026, provided all criteria are met. It added that digital VAT refund platform has also been updated to reflect the changes.

These will cover the construction of the new residence, including its fixtures and fittings, provided they are intended for the private use of the citizen or their family. 

Additionally, staff quarters for domestic workers, home gyms, security systems, swimming pools, fountains, landscaping and smart doors for main residence and garage, will also be eligible for claim. These features, the authority added, must form an integral part of the new residential property, be constructed on the same plot, and directly serve the primary residence.

Abdulaziz Al Mulla, Director General of FTA, said the move aligns with the UAE leadership’s directives, coinciding with the Year of Family and supporting home ownership and alleviating the financial burden on families.