Building a family home is one of the most meaningful investments a UAE National can make. Beyond the financial commitment, it is a decision tied to stability, family life, and long-term security.

For eligible UAE Nationals, the New Residences VAT Refund Scheme offers an important opportunity to reduce part of the financial burden associated with building a new private residence in the UAE.

Under this scheme, UAE Nationals may be able to recover VAT paid on certain construction-related expenses, provided the conditions, documentation requirements, and submission deadlines are met.

The latest Federal Tax Authority guide, updated in June 2026, provides further clarity on who may apply, which expenses may qualify, what documents are required, and which additional items are now covered from 1 January 2026.

Why This Matters

When building a new home, VAT is often paid across several stages of the construction process. This may include payments to contractors, consultants, suppliers, engineers, architects, and providers of building materials or fitted systems.

For families managing the cost of a new residence, these amounts can be significant.

The VAT refund scheme allows eligible UAE Nationals to request a refund on qualifying expenses connected to the construction of a new private residence. In practical terms, this means that if you are a UAE National building a new home for yourself and/or your family, part of the VAT paid during construction may be recoverable.

Who Can Benefit from the Scheme?

The scheme is available to UAE Nationals who are natural persons and who hold Family Data, which has replaced the previous Family Book system.

The residence must be built for the applicant and/or their family to live in. It should not be constructed for commercial purposes, business use, hotel use, guest house use, or rental to another person.

This means the scheme does not apply to expatriate residents, companies, developers, or businesses.

What Costs May Qualify?

VAT may be refundable on construction-related expenses that are directly connected to building the new residence.

Eligible expenses may include, among others:

• building materials such as cement, bricks, tiles, timber, and paint;
• services provided by builders, architects, engineers, and similar professionals;
• central air conditioning and split units;
• sanitary units and plumbing materials;
• flooring, window frames, glazing, doors, and wiring;
• built-in kitchens, sinks, work surfaces, and fitted cupboards;
• solar panels;
• light fittings;
• lifts and hoists;
• fire alarms and smoke detectors.

The general principle is that the expense should either be necessary for the construction of the residence or become part of the building itself.

What Changed in the 2026 Update?

The June 2026 update is particularly relevant because it adds or clarifies a wider range of eligible items, effective from 1 January 2026.

These include:

• dedicated extensions for a security guard’s room, driver’s room, or domestic maid’s room;
• doors, including electronic or smart doors and gates;
• garages and carports attached to the residence;
• a gym or playroom;
• landscaped agricultural areas within the land boundaries;
• reconstruction works, including demolition and rebuilding;
• smart and security systems fixed and integrated into the residence;
• swimming pools, fountains, or domestic decorative water features.

This clarification is important because many modern homes now include smart technology, landscaped areas, pools, additional service rooms, and other features that form part of the overall residential structure.

The updated guide provides clearer direction on when such items may be considered eligible.

What Costs Are Not Covered?

Not every home-related purchase will qualify for a VAT refund.

VAT is generally not refundable on movable or loose household items, such as:

• loose furniture, including sofas, chairs, tables, beds, and bedroom furniture;
• curtains and loose carpets;
• removable appliances such as fridges, freezers, washing machines, dryers, microwaves, coffee machines, and dishwashers;
• children’s play equipment;
• garden furniture, ornaments, and sheds;
• certain audio equipment, satellite boxes, separate free view boxes, telephones, and similar items.

A helpful way to assess eligibility is to ask whether the item is fixed into the residence or forms part of the construction. If the item is movable, decorative, or used as a household appliance, it will generally not qualify.

When Should the Refund Request Be Submitted?

The refund request should generally be submitted within 12 months from the date the new residence is completed.

The completion date is usually based on the earliest of the following:

• the date the residence is occupied;
• the date the building completion certificate is issued;
• another date accepted or stipulated by the Federal Tax Authority.

For retention payments made after completion, a separate refund request may be possible. This should generally be submitted within 6 months from the date the retention payment is made.

How Can UAE Nationals Apply?

Applications may be submitted through EmaraTax or Maskan, the smart application launched to support VAT refund claims for UAE Nationals building new residences.

Maskan allows applicants to add tax invoices during the construction stages and may help estimate the potential VAT refund amount, subject to eligibility review and verification.

Documents Applicants Should Prepare

Applicants should be ready to provide the following documents:

• Emirates ID;
• Family Data;
• property completion certificate;
• building permit;
• property site plan;
• proof of land ownership;
• bank letter or certificate showing the account holder’s name, bank name, and IBAN;
• power of attorney, where applicable.

Additional documents may also be requested, including construction contracts, consultancy agreements, tax invoices, proof of payment, bills of quantities, architectural drawings, variation orders, and credit notes.

Invoice Checklist: A Critical Step

Tax invoices are one of the most important parts of a successful refund claim.

Invoices should generally include:

• the applicant’s name;
• valid Tax Registration Numbers;
• the correct VAT amount;
• details linking the expense to the relevant residence or plot.

Simplified tax invoices are not accepted under this refund scheme.

Where an invoice is issued in the name of a consultant, contractor, agent, or related party, it must clearly show that the expense relates to the applicant and the relevant property. The other party must also confirm that they are not recovering the same input tax.

Practical Example

A UAE National builds a new villa for family use.

During construction, VAT is paid on contractor services, architectural and engineering services, cement, tiles, building materials, central air conditioning, built-in kitchen cabinets, sanitary units, solar panels, smart gates, landscaping within the land boundary, and a swimming pool.

If the applicant meets the scheme conditions and submits the correct documentation within the deadline, VAT paid on many of these items may be refundable.

However, VAT paid on loose furniture, curtains, a freestanding fridge, washing machine, coffee machine, garden chairs, or decorative ornaments would generally not be refundable.

Common Mistakes to Avoid

Before submitting a refund request, applicants should check that:

• all required fields are completed correctly;
• the information matches the supporting documents;
• the bank letter includes the correct IBAN and bank details;
• the completion certificate is uploaded, where applicable;
• invoices are valid tax invoices;
• the application is submitted within the required deadline;
• a power of attorney is included where there are multiple owners or representatives.

Taking the time to organize these details early can help reduce the risk of delays, amendment requests, or rejection.

Key Takeaway

The New Residences VAT Refund Scheme can be a valuable benefit for UAE Nationals building a new private home.

The 2026 update is especially important because it provides clearer coverage for several modern residential features, including smart systems, landscaping, attached garages and carports, swimming pools, reconstruction works, and certain dedicated extensions.

For UAE Nationals who are building or have recently completed a new residence, the message is simple:

Keep your invoices, organize your documents early, monitor your deadline, and claim what you may be entitled to recover.

Source Note

This article is based on the Federal Tax Authority VAT Guide titled “VAT Refund for UAE Nationals Building New Residences”, VAT Guide VATGRH1, published in June 2026. The guide explains the New Residences VAT Refund Scheme, including eligibility, deadlines, required documents, eligible and non-eligible expenses, and the June 2026 update to Appendix 1 based on FTA Decision No. 5 of 2026.

The guide is intended to assist taxpayers in understanding and applying VAT legislation. It is not legally binding and should not be treated as legal or tax advice.