UAE Nationals: FTA Expands VAT Refund on New Home Features

VAT refund on new home construction just became significantly more valuable for UAE nationals. On 9 June 2026, the Federal Tax Authority announced a major expansion of the New Residence VAT Refund Scheme, adding an entirely new category of expenses that citizens can now claim back — and the change applies retroactively to the start of the year.

If you are a UAE national who has built, is currently building, or is planning to build a private residence, this update directly affects how much VAT you can recover. Items that were previously excluded from the scheme — swimming pools, smart home systems, staff accommodation, landscaping, and more — are now eligible, and the FTA has confirmed that anyone who submitted a claim from 1 January 2026 onward can benefit from these new categories.

This guide walks through exactly what changed, what now qualifies, how much you could realistically save, and how to apply through EmaraTax or the Maskan app — using the most current information available from the FTA’s official announcement and its updated VAT Guide (VATGRH1).

VAT Refund on New Home: What the Scheme Actually Is

Before looking at what’s new, it helps to understand the foundation. The New Residence VAT Refund Scheme has existed since the UAE introduced VAT on 1 January 2018. It was created under Article 66 of the UAE VAT Executive Regulation to address a specific concern: UAE nationals building their own private homes shouldn’t be financially penalised by VAT in the same way a commercial property developer would be.

Under the scheme, a UAE national who constructs a new residence — intended solely for personal or family use — can apply to recover the VAT paid on qualifying construction expenses. This isn’t a discount applied at the point of purchase. It works as a refund: VAT is paid as normal during construction, and the applicant later claims it back from the FTA once the home is complete or near completion.

The scheme has grown more accessible over time. What used to be a largely paper-based process has become fully digital, run through the EmaraTax portal and the purpose-built Maskan app, which allows nationals to scan invoices, link them to their project, and track their refund status in real time throughout construction.

What changed on 9 June 2026 isn’t the existence of the scheme — it’s the breadth of what counts as a qualifying expense within it.

VAT Refund on New Home: The June 2026 Expansion Explained

The Federal Tax Authority’s announcement, made under FTA Decision No. 5 of 2026, significantly widened the categories of construction expenses that UAE nationals can claim. According to Abdulaziz Al Mulla, Director-General of the FTA, the initiative reflects the UAE leadership’s commitment to supporting citizens and aligns directly with the UAE’s Year of Family, reinforcing the government’s focus on home ownership and family wellbeing.

The timing and framing of this update matter. Rather than treating modern residential features as luxury add-ons outside the scope of “construction,” the FTA has acknowledged that contemporary UAE homes routinely include smart technology, dedicated staff facilities, and outdoor living spaces as standard elements of residential design — not optional extras. The expanded scope brings the refund scheme in line with how homes are actually being built today.

Crucially, the FTA confirmed this change is not just forward-looking. It applies to all VAT refund applications submitted on or after 1 January 2026, regardless of when in 2026 the application is actually filed. This retroactive application is a significant detail, because it means UAE nationals who already submitted a claim earlier this year — potentially before some of these categories were added — may be able to revisit their claim or include these costs in a subsequent application for the same residence, such as a retention payment claim.

VAT Refund on New Home: What’s Newly Eligible

This is the part every applicant needs to understand clearly, because it determines exactly what you should be tracking and keeping invoices for. Based on the FTA’s official announcement, the newly eligible expense categories include:

Staff accommodation. Living quarters for household staff — including watchmen, drivers, and domestic workers — now qualify as part of the residence, recognising that staff accommodation is a standard feature of many UAE family homes.

Home gyms and game rooms. Dedicated recreational and fitness spaces built within the residence are now included, reflecting their growing presence in modern UAE home design.

Smart home and security systems. Integrated smart home technology and security systems — along with their built-in components — now qualify. This is a particularly significant addition given how central smart technology has become to new residential construction.

Electronic and smart doors. Smart and electronic doors for both the main residence and garage are now covered under the scheme.

Swimming pools and water features. Swimming pools, fountains, and decorative indoor water features are now eligible expenses, addressing a long-standing gap where outdoor living features were excluded.

Landscaping works. Costs associated with landscaping the property now qualify, extending the refund beyond the building structure itself to the surrounding grounds.

Complete home reconstruction. For UAE nationals undertaking a full reconstruction of an existing home — including demolition and rebuilding — these costs are now explicitly covered under the expanded scheme.

Each of these categories represents real, often substantial spending during a typical UAE home build. Smart home systems and security installations alone can run into tens of thousands of dirhams on a mid-sized residence, and a swimming pool with landscaping can represent a significant share of total project cost. Bringing these into the refund scheme materially changes the total recoverable VAT for many applicants.

VAT Refund on New Home: How Much Citizens Can Actually Save

The FTA has put real figures behind this initiative, and they’re worth understanding both at the individual and national level.

At the individual level, the FTA estimates the average refund per claim at approximately AED 25,000. This figure reflects the broader base of eligible expenses now available to applicants, rather than the narrower scope that applied previously. Naturally, individual outcomes will vary significantly depending on the size of the residence, the specific features included, and total construction spend — a larger villa with a pool, smart systems, and staff quarters will recover considerably more than a smaller, simpler build.

At the national level, the FTA projects the expanded scope will generate around AED 200 million in additional VAT savings for UAE nationals. Based on projected 2026 demand, the authority expects the total value of approved refund claims to exceed AED 1 billion this year — a substantial jump from approximately AED 754 million recorded in 2025. That year-on-year increase reflects both the expanded eligibility criteria and an anticipated rise in participation as awareness of the scheme grows.

The FTA has also signalled that increasing awareness is now a priority. The authority announced plans to host discussion sessions with citizens across local district councils to introduce the expanded initiative, explain the FTA’s citizen-focused services more broadly, and gather feedback to refine the scheme further. This suggests the current expansion may not be the final word — the FTA appears to be treating this as an evolving, citizen-responsive programme rather than a one-time update.

VAT Refund on New Home: Who Is Eligible to Claim

Eligibility for the scheme remains tied to a few core conditions, and the June 2026 expansion hasn’t changed these fundamentals — it has only widened what counts as a qualifying expense once you meet them.

To qualify, you must be a natural person holding UAE nationality, with valid Family Data registered (the digital replacement for the old Family Book, in place since 2024). The residence being built must be used solely as a private home for yourself and your immediate family — it cannot be leased out, used for any commercial purpose, or built for resale. The scheme does not extend to property developers, investors, or anyone constructing a residence on behalf of someone else for commercial gain.

The FTA’s updated VAT Guide also provides helpful clarification on what constitutes a separate, qualifying residence — relevant for nationals building detached structures or extensions on the same plot. A detached or additional building may qualify as its own residence where it contains proper sleeping and washroom facilities. By contrast, structures such as standalone garages, playrooms without washroom facilities, or majlis extensions lacking sleeping quarters generally do not qualify as separate residences under the scheme.

VAT Refund on New Home: How to Apply Through EmaraTax or Maskan

Applications for the New Residence VAT Refund Scheme are submitted through one of two synchronised digital channels — the EmaraTax portal or the Maskan app — both of which the FTA has continued to refine throughout 2026 to make the process more straightforward.

Applying Through EmaraTax

1. Register for an EmaraTax account through the FTA’s website (or log in using UAE Pass) and activate it
2. From your dashboard, go to the “User Profile” screen
3. Select “Special Refunds”
4. Click “New Residence VAT Refunds”
5. Click “New Refund Request”
6. Complete the application form and submit, along with your supporting documents

Applying Through Maskan

1. Log in to the Maskan app using UAE Pass
2. Create a housing-specific project for your build
3. Upload invoices and supporting documents continuously throughout the construction period — Maskan allows suppliers to generate a barcode that links invoices directly to your project as you go
4. Complete and submit the refund application once your Completion Certificate is issued

The Maskan approach has a real practical advantage: by uploading invoices as construction progresses rather than gathering them all at the end, applicants reduce the risk of misplaced documentation and can view an estimated VAT refund based on recorded costs throughout the build, subject to final eligibility and verification.

Documents You Will Need

Regardless of which platform you use, be prepared to provide:

• A copy of the applicant’s Emirates ID (not required if logging in via UAE Pass)
• Screenshot or confirmation of UAE Family Data
• A copy of the property completion or occupancy certificate
• A bank letter on official letterhead showing your name, bank, and IBAN (screenshots of online banking are not accepted)
• Tax invoices, building contracts, and consultancy agreements covering the construction period
• Architectural drawings and the building permit, if requested during review

VAT Refund on New Home: What Happens After You Submit

Once your application is submitted, the process moves through two distinct phases.

Phase 1 — Initial FTA Review. The FTA conducts a preliminary eligibility check, generally completed within two working days of receiving all required documents. If the application passes this stage, it is forwarded to an independent Verification Body for detailed assessment. This body does not charge UAE nationals any fee for its review — the service is provided free of charge as part of the scheme.

Phase 2 — Verification Body Review. The Verification Body examines the full claim, including invoices, contracts, and any supplementary documents needed to confirm the expenses genuinely relate to the eligible residence. This stage typically takes around 25 working days from the date the complete application — including all supporting documents — is received. If additional information is needed, the Verification Body will email the applicant directly requesting it.

A UAE national can generally submit one refund request per residence. However, the scheme does allow for a second, separate application specifically covering retention payments — the portion of payment often withheld from contractors until a defined period after project completion, since these costs frequently fall outside the timeline of the original claim.

VAT Refund on New Home: Common Mistakes That Delay Claims

The FTA’s updated guidance includes a dedicated section on common errors, reflecting patterns seen across previous applications. Avoiding these can meaningfully speed up your claim:

Submitting screenshots instead of official documents. Bank details must be provided via an official letter on bank letterhead — screenshots from a banking app are explicitly not accepted.

Missing the 12-month window. Applications generally must be submitted within 12 months of the earlier of the building completion certificate date or the date the property is occupied. Waiting too long after completion risks losing eligibility entirely.

Confusing detached structures with separate residences. As noted earlier, a standalone garage or majlis without sleeping and washroom facilities does not count as a separate qualifying residence — applicants sometimes mistakenly submit these as independent claims.

Incomplete invoice trails. Gaps in the invoice record during construction — particularly for newly eligible categories like smart home systems or landscaping — can slow down Verification Body review. Using the Maskan app to log invoices as they’re issued, rather than retroactively, significantly reduces this risk.

Mixing personal and commercial use. Any indication that the residence will be leased, used for business purposes, or built for resale will disqualify the claim. The scheme is strictly for personal and family use.

VAT Refund on New Home: Why Acting on This Update Matters Now

If you are a UAE national who has already submitted a VAT refund claim for a residence in 2026, it’s worth reviewing what was included in that submission against the newly eligible categories. Since the expansion applies retroactively to 1 January 2026, costs for items like smart home systems, swimming pools, or staff accommodation that may not have been part of your original claim could potentially still be recovered — particularly if you have a retention payment claim still pending or upcoming for the same residence.

If you are currently mid-construction, this is the moment to start tracking invoices for the newly eligible categories specifically. Smart home installations, security systems, pool construction, and landscaping contracts should all be retained with the same diligence as your core building material invoices.

And if you are still in the planning stage, understanding the full scope of what’s now recoverable can genuinely influence how you budget your build — knowing that a well-specified smart home system or a swimming pool now carries a VAT recovery path can change the calculus on what features to prioritise.

Conclusion: Make the Most of the Expanded VAT Refund on New Home

The VAT refund on new home construction has just become considerably more valuable for UAE nationals. With staff accommodation, smart home systems, swimming pools, landscaping, and full reconstruction projects now included under FTA Decision No. 5 of 2026 — and the change applied retroactively to January 2026 — this is one of the most meaningful updates to the New Residence VAT Refund Scheme since it launched in 2018.

With an average refund of around AED 25,000 per claim and the FTA expecting over AED 1 billion in approved refunds this year, the financial impact for eligible families is real. But realising that benefit depends on accurate documentation, correctly tracked invoices, and a properly prepared application through EmaraTax or Maskan.

Whether you’re reviewing an existing claim, mid-build, or just starting to plan, getting this right the first time saves both money and time.

About My Taxman

My Taxman is a UAE-based firm of tax consultants and financial advisors supporting individuals and businesses across Dubai, Sharjah, and the wider Emirates. Alongside our core services in corporate tax, VAT compliance, excise tax, transfer pricing, accounting and bookkeeping, CFO services, due diligence, fundraising, and valuation assessment, our team understands the practical detail behind FTA schemes like the New Residence VAT Refund — including what genuinely qualifies, how to structure documentation, and how to avoid the common errors that delay claims.

We stay closely aligned with every FTA update, including changes like FTA Decision No. 5 of 2026, so our clients never have to interpret regulatory announcements on their own.

📞 Call us: +971-543223140 📧 Email: connect@mytaxman.ae 🌐 Visit: mytaxman.ae

Get in touch with our team today to find out how much you could recover under the expanded VAT refund on new home construction.

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