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The UAE continues to demonstrate its dedication to supporting its nationals in realizing their dreams of homeownership. One notable initiative is the substantial support through VAT refunds, which has seen a remarkable increase of more than Dh3.2 billion refunded to UAE citizens building new residences as of June 2025. If you’re a UAE national planning to construct your new home, understanding how the UAE VAT refund for new home construction works can make a significant difference in easing your financial journey.
What is the UAE Tax Refund Scheme for Homebuilders?
The UAE government has introduced a specific VAT refund scheme designed to help nationals reduce the financial burden of building a new home. Essentially, this initiative allows UAE citizens to reclaim the VAT they’ve paid on certain construction-related expenses during the development of their properties.
The main goal? To encourage homeownership among Emiratis by making it more affordable and accessible. The scheme also aligns with broader national efforts to enhance housing provisions for citizens.
Who Qualifies?
If you’re a UAE national involved in building your own residence, you could be eligible. Here are the key criteria:
- You must be a UAE citizen.
- The property is solely for your private residential use—not for commercial, rental, or resale purposes.
- Your home must be fully completed, and the refund application must be submitted within 12 months from the date of completion or first occupancy, supported by the official completion certificate from the municipality.
- The VAT paid on expenses related to materials, professional services, and other directly applicable costs can be claimed.
It’s important to note that this scheme is exclusive to owner-occupied residences, ensuring the support goes directly to citizens building their personal homes.
What can be Refunded?
The scheme covers expenses directly tied to your construction project, including:
- Construction Materials: cement, bricks, wood, steel, etc.
- Professional Services: fees paid to contractors, architects, engineers, and consultants.
- Other design and construction-related costs.
Refund Rates (Based on 2024 Guidance, with Potential Updates for 2025)
- Up to 30% of eligible expenses for apartments (with a maximum refund of AED 500,000).
- Up to 50% for villas or larger homes (also capped at AED 500,000).
These generous rates significantly ease the financial pressure of building a new home.
How does the Application Process Work?
The UAE’s Federal Tax Authority (FTA) has centralized the process, making it entirely digital through the ‘Maskan’ mobile app and online portal. This means you can apply for your VAT refund smoothly and paperlessly.
Here are the key steps:
- Register and Submit: Complete your application digitally, attaching all necessary invoices and supporting documents, including your home’s completion certificates.
- Apply Timely: Applications should be submitted within 12 months from the date your home is completed or first occupied, as required by the FTA. If you made retention payments, they can be claimed within 6 months of payment.
- Keep Records: Retain all original VAT invoices and relevant documents throughout the project.
- Await Processing: Once all documents are verified, the FTA typically processes VAT refund applications for homebuilders within approximately 25 working days.
Recent Achievements and 2025 Updates
By mid-2025, the scheme had seen extraordinary growth:
- Over 38,000 applications approved.
- Dh3.2 billion refunded to UAE nationals.
- A 22% increase in applications and a 25% rise in total refunds compared to the previous year.
Increased awareness campaigns drive the scheme’s success, simplified digital procedures, and ongoing enhancements aimed at making the process even more efficient.
Common Questions
1.How to apply for UAE VAT refund for a new home?
Submit your application via the EmaraTax portal with invoices, permits, and ID proof.
2. How long does UAE home VAT refund take?
FTA usually processes refunds within 20 working days after a valid submission.
3. Can I claim for multiple homes?
Yes, each property qualifies for a separate claim, processed independently.
4. Who owns the account for the refund?
The IBAN provided must be linked to your name and be active for the refund transfer.
5. Are rental or resale properties eligible?
No. The scheme is exclusively for owner-occupied homes, not for rental or resale purposes.
Conclusion
Through reliable services for VAT in Dubai, the UAE continues to support citizens building their own homes. If you’re planning to build your residence in 2025, utilising this program can help offset costs and ease your financial planning. Stay informed about the latest updates, keep your documentation organized, and make the most of this government support to turn your housing dreams into reality.
