The Federal Tax Authority expands the scope of VAT refunds for the construction of new citizen housing

Abu Dhabi, June 9 / WAM / The Federal Tax Authority launched a new initiative aimed at expanding the scope of payments eligible to recover the value-added tax paid for the construction of new citizens’ homes, by allowing the value-added tax to be recovered for an additional group of payments related to the construction of new citizens’ homes, within the framework of the directives of the wise leadership and coinciding with the “Year of the Family.”

According to a press release issued today, expanding the scope of expenses eligible for refund is expected to contribute to achieving financial savings estimated at approximately 200 million dirhams in value-added tax for more than 8,000 citizens, with an average of approximately 25,000 dirhams per application, which reflects the initiative’s role in supporting homeownership and alleviating the financial burdens on families.

The initiative is expected to achieve tangible financial benefits for the country’s citizens who are building new homes, and based on expectations for the volume of applications during the year 2026, the total value of approved applications is expected to exceed one billion dirhams, compared to approximately 754 million dirhams during the year 2025.

The Federal Tax Authority explained that, during the coming period, the focus will be on educating citizens about the advantages provided by the initiative and how to benefit from them, noting that dialogue sessions will be held with citizens in all emirates in meetings in suburban councils at the state level, for direct communication in community dialogues during which the new initiative and the Authority’s services in general provided to citizens will be reviewed and introduced, and citizens’ opinions, observations, and proposals for further development will be learned to achieve their aspirations at the best levels.

The Authority pointed out that the initiative, which has entered into force, applies to all requests to recover value-added tax on the construction of new citizens’ homes submitted to the Authority as of January 1, 2026, coinciding with the “Year of the Family,” taking into account the fulfillment of the necessary requirements, noting that the digital service has been developed and updated for citizens to recover value-added tax on the construction of their new homes, by including the payments eligible for refund that have been approved under the initiative.

His Excellency Abdulaziz Mohammed Al Mulla, Director General of the Federal Tax Authority, said that the new tax facilities provided by the Authority to citizens come within the framework of the vision of the wise leadership that aims to provide all means of support for citizens, provide the highest levels of services to make them happy, and intensify integrated national efforts to enhance societal stability and well-being.

He explained that, according to the new initiative, it is permissible to recover the value-added tax paid for some items related to the construction of the citizen’s new home, which form part of the components of the home, its annexes or equipment, and which are allocated for his private residential use or his family members, taking into account the fulfillment of the conditions, procedures, and documents supporting the refund requests.

His Excellency stated that these additional items included in the initiative include: the annex for the room of the guard, driver, or domestic helper, the gym, the games room, security and smart equipment and their accessories integrated within the construction of the new housing, electronic or smart doors for the residence and for the place designated for cars, swimming pools, fountains or home water basins for decoration, in addition to the work of rebuilding the residence, including the costs of demolition and reconstruction, and agricultural spaces, if these items are among the components of the new residence. It was built within the same plot of land and serves the use of the new residence.

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