https://amaudit.ae/services/vatBuilding a new home is a meaningful milestone—and for UAE Nationals, it comes with the added benefit of potential VAT refunds. Under the UAE’s VAT law, Emiratis constructing residential properties for personal use can claim back certain expenses. If done correctly, this can significantly ease the financial burden of construction.
Here’s what you need to know to make the most of this opportunity.
What Is the VAT Refund for UAE Nationals?
The UAE government allows UAE Nationals to reclaim the Value Added Tax (VAT) they’ve paid on specific costs related to building a new home. This initiative supports citizens by helping offset part of the construction expenses, making homeownership more accessible.
Who Is Eligible?
To qualify for the VAT refund, you must meet the following conditions:
The property is for residential use and intended for the applicant and their family.
It must not be used for commercial purposes, such as rental or resale.
The construction must be complete, with a certificate issued by the local authorities.
Original VAT invoices must be kept for all relevant expenses.
What Expenses Are Covered?
You can claim VAT refunds on:
Building materials like cement, wood, bricks, steel, and other supplies used during construction.
Professional services such as fees paid to contractors, architects, engineers, and construction consultants.
However, non-eligible items include:
Furniture
Home appliances
Landscaping or garden structures
Only materials and services directly tied to the physical construction of the residence qualify.
How to Apply for the Refund
To ensure a smooth refund process, follow these steps:
Collect Documents
Prepare all your original VAT invoices and the official completion certificate.Register with the Federal Tax Authority (FTA)
Create an account on the FTA’s e-Services portal.Submit Your Application
Complete and submit the ‘New Residence VAT Refund’ form, attaching all required documentation.FTA Review
The FTA will evaluate your application and notify you of the result.
Don’t Miss the Deadline
You must apply for the refund within 12 months of the property’s completion. This is determined by whichever comes first:
The date the home is first occupied
The date the official completion certificate is issued
Late applications risk disqualification, so staying on top of deadlines is essential.
Common Challenges to Watch Out For
While the refund process is beneficial, it isn’t always straightforward. Some common issues include:
Incomplete or missing invoices
Misunderstanding what expenses qualify
Delays due to incorrect documentation or late submissions
That’s where working with a VAT specialist can make all the difference.
