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September 5, 2026VAT Refund for UAE Nationals Building New Residences
Key Takeaways
- UAE nationals who own land in the UAE and build (or commission the construction of) their own home can apply to the FTA for a refund of the VAT paid on eligible building materials and contractor services.
- The application is submitted through EmaraTax or the Maskan app.
- The application must be filed within 12 months of the home being completed (occupied or issued a completion certificate, whichever is earlier).
- Processing typically takes up to 20 business days once all documents are in.
What Is the New Residences VAT Refund Scheme?
When a UAE national buys land and builds their own home, they pay 5% VAT on most of the materials and professional services that go into that build. The New Residences Refund Scheme exists specifically to give that VAT back, recognising building a private family home isn't a commercial activity.
This isn't automatic. You need to actively apply, and the Federal Tax Authority (FTA), working with an independent Verification Body, reviews your claim against a fairly detailed set of conditions before releasing the refund.
Who Can Apply?
To be eligible, you must:
- Be a natural person holding UAE nationality, and
- Hold Family Data (the digital replacement for the old paper Family Book, issued via the Federal Authority for Identity, Citizenship, Customs & Port Security).
Companies, trusts, and non-UAE nationals don't qualify under this scheme. It's designed specifically for UAE nationals building their own private residence.
If more than one person owns the property, one owner can apply on behalf of the others, but only with a Power of Attorney authorising them to receive the refund on everyone's behalf. If the application is being made on behalf of a minor, court permission is required instead.
What Counts as a Residence for this Scheme?
A residence means a newly built structure, including villas and townhouses, used mainly as someone's private home, containing at a minimum:
- Sleeping quarters
- Washroom/bathroom facilities
- Cooking facilities
Buildings that don't qualify include hotel apartments, serviced apartments, guest houses, or anything registered for commercial use.
A small home office is fine. If part of the house is used as a study or workspace, it's still treated as a residence, as long as that use is minor compared to the overall living space.
What about extensions or additional structures on the same plot?
You can claim for following, provided they function as an independent living space with sleeping, washroom, and (direct, easy) cooking access:
- A second, fully self-contained house built later on the same plot
- An added floor or extension that can function as its own private residence
- A standalone building on the plot with its own sleeping, washroom, and cooking access
You cannot claim for:
- A playroom added later with no washroom/sleeping facilities
- A majlis or kitchen-only extension without washroom and sleeping facilities
- A garage or carport added after the main residence was already completed
- Landscaping or security systems installed after the residence was already completed
What Expenses Can You Actually Claim VAT Back On?
The refund only covers two broad categories:
- Building materials — the physical goods a builder would normally incorporate into a residential building or its site (excluding furniture and electrical appliances).
- Contractor services — the services of builders, architects, engineers, and similar professionals needed to complete the construction.
You can also recover VAT on transport and clearing agent fees tied directly to importing eligible building materials.
The test the FTA uses: is it incorporated into the building?
Goods count as incorporated if removing them would need tools, cause damage, or require remedial work to the structure. Loose, removable items don't qualify.
Eligible vs. not eligible
Eligible
- Structural building materials (bricks, cement, tiles, timber)
- Central air conditioning and split units
- Fitted kitchens, sinks, worktops, cupboards
- Flooring (excluding loose carpets)
- Doors, smart doors/gates, window frames and glazing
- Fire alarms, smoke detectors, burglar alarms
- Sanitary units, shower units
- Swimming pools, fountains, decorative water features
- Solar panels, lifts, hoists
- Wiring embedded in the structure
- Architect, builder, and engineer fees
- Dedicated rooms for a security guard, driver, or domestic staff member
- Garages and carports attached to the residence (built as part of the original construction)
- Gym or playrooms within the residence
- Landscaped agricultural areas within the boundaries of the land
- Reconstruction works, including demolition and rebuilding
- Smart and security systems fixed and integrated as part of a complete system
Ineligible
- Free-standing appliances (fridges, washing machines, ovens, dishwashers)
- Loose furniture (sofas, tables, chairs, loose carpets)
- Audio/entertainment equipment, satellite boxes, standalone CCTV
- Garden furniture, ornaments, sheds
- Children's play equipment (as a standalone item)
Documents You'll Need
When submitting your refund request, have these ready:
- Copy of your Emirates ID (EID)
- Copy of your Family Data (Family Sequence Number)
- Property completion certificate and building permit
- Property site plan
- Proof that you own the land the residence is built on
- A stamped letter from your bank confirming your account holder name, bank name, and IBAN
- Power of Attorney (if applying on behalf of a co-owner) or court permission (if applying on behalf of a minor)
If your application moves forward for detailed verification, the Verification Body may also request:
- Architectural layout drawings
- Bill of Quantities
- Construction contract and any addenda
- Consultancy agreement and any addenda
- Variation orders
- Invoices showing returned items and any related credit notes
- Tax invoices and proof of payment from contractors and consultants
Getting your tax invoices right matters
Simplified tax invoices are not accepted for this refund. Your invoices need to show your full name as the owner, a valid Tax Registration Number (TRN) of the supplier, the correct VAT amount, and other details required for a full tax invoice.
If an invoice is issued to a related party, consultant, contractor, or agent instead of directly to you, it must clearly state it's for your use by including your full name, reference your new residence address (including the plot number), and confirm the related party isn't also claiming the VAT on that same invoice.
Alternatively, an invoice can still work if it includes: your full name, your signature, your EID number, and the full plot number (clearly labelled as such; a bare number without description won't be accepted) or street address.
How to Apply
- Submit through EmaraTax or the Maskan app — These two platforms are synchronised, so you can start on one and continue on the other. Maskan also lets you scan tax invoices as you receive them during construction and gives you a running estimate of your expected refund.
- Receive an acknowledgement and reference number from the FTA once your application is logged.
- Initial eligibility review — The FTA checks whether you qualify under the scheme and may ask for more information at this stage.
- Detailed verification. Eligible claims are passed to an independent Verification Body, which reviews your invoices and supporting documents in detail. This service is free to UAE nationals. You should never be asked to pay a Verification Body directly.
- Outcome — The FTA notifies you whether your claim is approved, amended, or rejected. Once approved, the refund is paid to the IBAN provided in your bank letter.
Reviewing a complete application typically takes up to 20 business days.
Deadlines You Cannot Miss
You must submit your refund request within 12 months of your new residence being completed. Completion is defined as the earliest of:
- The date you actually move in and occupy the residence
- The date a competent UAE authority issues your Building Completion Certificate
- A date otherwise determined by the FTA
Keep documentary proof of your actual move-in date. The FTA will need evidence, not just a verbal statement.
Exceptions to the 12-month deadline
In limited situations, the 12-month clock can restart from when a qualifying event ends, rather than from the original completion date:
- You were genuinely unable to apply on time, for example, due to military service or illness.
- There's an ongoing legal dispute related to the residence.
- The Completion Certificate was issued, but genuine technical work still needed to be finished before the home was actually livable. This doesn't cover additional work you decide to do afterwards, but only work needed to complete the original build.
You'll need official documents, affidavits, or similar evidence to support any of these, and the FTA has full discretion to accept or reject your reasoning.
Retention Payments
Many construction contracts include a retention — a final payment held back from the contractor until after the 12-month window, often to cover any defects.
If you know you'll be making a retention payment, flag this when you file your original application.
Once you actually make the retention payment, you get a second window: 6 months from the payment date to claim the VAT on it. If you have several retention payments, you can bundle them into one claim, as long as it's filed within 6 months of the first retention payment.
What Happens If You Overclaimed?
If you later realise you claimed more VAT than you were entitled to, you're required to submit a Voluntary Disclosure to correct it.
What If You Rent Out or Sell the Home Afterwards?
The refund is granted on the basis the property will be used solely as your (or your family's) residence.
If you later use it for something else, for example, leasing it out, you're required to notify the FTA, and you may be asked to repay some or all of the VAT refunded to you.
Common Mistakes that Delay or Derail Refund Claims
Based on the FTA's own published guidance, these are the errors that come up again and again:
- Mismatched details — Your EID, building permit, and bank letter all need to show consistent information.
- Incomplete bank letters — The letter must be on the bank's letterhead and clearly show your IBAN. A screenshot of your banking app won't cut it.
- Missing completion certificate from the relevant municipality.
- No Power of Attorney on multi-owner properties. If there's more than one owner, this document is essential for authorising the refund to go to one owner's account.
- Using simplified tax invoices instead of full tax invoices with a valid TRN.
- Vague plot references on invoices — A plot number needs to be clearly labelled as such.
Frequently Asked Questions
This guide is intended for general informational purposes and reflects the VAT legislation and FTA guidance in effect at the time of writing. It is not a substitute for professional tax advice, and individual circumstances can affect eligibility and outcomes. For advice specific to your situation, please contact our team.
