The Federal Tax Authority (FTA) has released an updated version of its VAT Refund Guide for UAE Nationals Building New Residences (VATGRH1) in June 2026. This update is significant, it incorporates the provisions of FTA Decision No. 5 of 2026, issued on 2 June 2026 and effective retroactively from 1 January 2026, which expands the list of construction-related expense items eligible for VAT recovery.

For UAE Nationals who have recently completed or are in the process of constructing a new home, this update opens new opportunities to recover VAT on a broader range of costs. This bulletin explains what has changed, who qualifies, what you can claim, and how to apply.

Under the UAE VAT framework, UAE Nationals who own or acquire land and build or commission the construction of their own private residence are entitled to claim a special VAT refund from the FTA on eligible construction-related expenses. This is governed by Article 66 of the VAT Executive Regulation (Cabinet Decision No. 52 of 2017).

This scheme is distinct from the standard VAT recovery mechanism available to VAT-registered businesses. It is designed specifically to support UAE Nationals in building homes for personal or family use, and the refund is processed outside of the normal tax return system.

To be eligible to submit a Refund Request under this scheme, the applicant must meet all of the following conditions:

•     Be a natural person who is a UAE National (i.e. a UAE citizen).

•     Hold valid Family Data, note that since 2024, the traditional Family Book has been replaced with a digital 'Family Data' record issued by the Federal Authority for Identity, Citizenship, Customs and Port Security (ICP).

•     Own or have acquired a plot of land in the UAE on which the new residence is being or has been constructed.

•     The building must be used solely as a private residence for the applicant and/or his or her family, it cannot be rented out, used commercially, or registered as a commercial property.

The term 'residence' under this scheme refers to a newly constructed building including villas and townhouses, used predominantly as a private home. To qualify, the building must at minimum include:

•     Sleeping quarters

•     Kitchen / cooking facilities

•     Washroom or bathroom facilities

The guide clarifies that a subsequent structure built on the same plot (such as a separate annex) may also qualify as a 'residence' if it independently fulfils the above three criteria  i.e., it has its own sleeping, cooking, and bathroom facilities.

This is the most important aspect of the June 2026 update. The guide now incorporates an expanded list of eligible expense items, including several new categories that are effective from 1 January 2026 under FTA Decision No. 5 of 2026. The key principle remains that eligible expenses must either be building materials permanently incorporated into the structure of the residence, or professional services directly related to its construction.

Core Eligible Expenses (as previously applicable)

The following expense categories have always been eligible under the scheme:

•     Building materials forming part of the structure (bricks, cement, tiles, timber, paint)

•     Professional services of builders, architects, engineers, supervisors and consultants

•     Central air conditioning units and split units

•     Fixed flooring (excluding loose carpets)

•     Kitchen sinks, fitted cupboards and work surfaces

•     Fire alarms, smoke detectors and burglar alarms

•     Solar panels, light fittings and power points

•     Sanitary and shower units, guttering, plumbing materials

•     Window frames, awnings and glazing

•     Wiring embedded within the structure of the building

•     Lifts and hoists

•     Fencing permanently erected around the boundary of the dwelling

New Eligible Items - Effective 1 January 2026

Expenses That Are NOT Eligible

The following items remain outside the scope of the refund scheme regardless of when they were purchased:

•     Free-standing electrical appliances: fridges, freezers, ovens, dishwashers, washing machines, dryers, coffee machines, microwaves

•     Furniture not affixed to the building: sofas, tables, chairs, bedroom furniture, curtains, loose carpets

•     Audio/visual equipment: built-in speakers (unless part of an integrated smart system), satellite boxes, freeview boxes

•     Standalone CCTV cameras not forming part of an integrated fixed security system

•     Children's play equipment (freestanding)

•     Garden furniture, ornaments, and garden sheds

Timing is critical. UAE Nationals must submit their Refund Request within 12 months from the date of completion of the new residence. The 'date of completion' is the earlier of:

•     The date the residence is first occupied by the applicant or family

•     The date a Building Completion Certificate is issued by a competent UAE authority

•     Any other date stipulated by the FTA

The applicant must retain evidence of the date of occupancy (such as utility connection records, DEWA connection dates, or similar documentation).

Retention Payments

Where a UAE National makes retention payments to contractors after the 12-month period has lapsed (which is common in construction contracts), a separate Refund Request can be submitted for the VAT on those payments. This must be filed within 6 months from the date the first retention payment is made. Multiple retention payments may be consolidated into a single claim, provided the 6-month window is observed. The intention to make retention payments should be flagged in the initial application.

All applications must be submitted digitally through one of the following FTA platforms:

•     EmaraTax - the FTA's official online tax services portal

•     Maskan App - a dedicated smart application available on Google Play and Apple App Store, designed specifically for this refund scheme. The app enables UAE Nationals to log tax invoices as they are incurred, generates a unique QR code for suppliers to scan, and provides an estimated VAT refund amount.

Both platforms are synchronised, so activity on one is reflected on the other.

Step-by-Step Application Flow

The following documents must be submitted with your application to the FTA:

•     Copy of Emirates ID of the applicant

•     Copy of Family Data (Family Sequence Number)

•     Property Completion Certificate and Building Permit

•     Property Site Plan

•     Documentary proof of land ownership in the UAE

•     Bank letter or certificate (on the bank's letterhead) showing account holder's name, bank name, and IBAN

•     Power of Attorney (if the application is submitted on behalf of the owner)

•     Court permission (if filing on behalf of minors)

The Verification Body may additionally request architectural layout drawings, bills of quantities, construction contracts, consultancy agreements, variation orders, tax invoices, credit notes, and payment receipts.

Important Note on Tax Invoices

The FTA has highlighted the following common mistakes that lead to delays or rejection of claims:

•     Incomplete fields in the application that do not match the supporting documents (e.g. mismatched Emirates ID details or building permit information)

•     Failure to upload the bank letter with IBAN on the bank's official letterhead

•     Missing Municipality Completion Certificate where applicable

•     Properties with multiple owners submitting claims without a Power of Attorney authorising one owner to receive the refund

•     Submitting Simplified Tax Invoices instead of full Tax Invoices

•     Including non-eligible expenses such as loose furniture, appliances, or items installed after the residence was completed

The June 2026 update to VATGRH1 is a meaningful expansion of the VAT refund scheme and reflects the FTA's commitment to accommodating the realities of modern residential construction in the UAE. The retroactive effective date of 1 January 2026 for the new eligible items means that UAE Nationals who have incurred costs in these newly added categories since the start of this year may now have refund opportunities that were previously unavailable.

We recommend UAE Nationals who are currently building or have recently completed a new residence to take the following action:

•     Review all construction invoices from 1 January 2026 onwards for newly eligible items such as swimming pools, smart security systems, gym rooms, landscaping, and smart doors/gates

•     Confirm whether the 12-month refund window is still open for your project and submit promptly if approaching the deadline

•     Ensure all Tax Invoices are in your name and comply with the FTA's requirements before submission

•     Download and use the Maskan App to track and log your invoices throughout the construction process

•     If you have already submitted a claim and incurred additional eligible costs (particularly retention payments), consider whether a follow-up application is appropriate