How to claim a VAT refund on new residential properties in the UAE

What is a VAT refund on new residential properties in the UAE?

A VAT refund on new residential properties in the UAE is a mechanism that allows UAE nationals to recover the 5% Value Added Tax (VAT) they paid on the construction or purchase of a new home for personal use. The Federal Tax Authority (FTA) administers this refund under Federal Decree-Law 8 of 2017 and its executive regulations. It exists because residential property for personal living is treated as an exempt or zero-rated supply in many scenarios, yet construction costs carry VAT.

This refund is separate from the VAT refund available to UAE businesses and the VAT refund scheme for tourists. Understanding the rules is important for anyone building or buying a newly constructed residence in the UAE. For broader context on how VAT works in the country, see our UAE VAT hub.

Who qualifies for this VAT refund?

Not every property buyer can claim a refund. The FTA sets strict eligibility criteria. Meeting all of them is mandatory before you submit an application.

Eligibility criteria at a glance

Criterion	Requirement
Nationality	Applicant must be a UAE national (citizen)
Property type	Newly constructed residential building or villa
Purpose	Used as the applicant's or the applicant's family's residence, not for investment or rental
VAT paid	VAT must have been charged by a VAT-registered supplier on construction-related goods and services
Time limit	Application must be filed within 12 months of the building's completion date
Registration status	The applicant does not need to be VAT-registered

Who does not qualify?

Non-UAE nationals, including residents holding a visa, are not eligible. Properties purchased for commercial rental, resale, or investment do not qualify either. Renovations or extensions to existing buildings are also excluded. Only costs related to a new build count.

If the property is partially used for business purposes, the refund applies only to the residential portion. Mixed-use buildings require careful apportionment.

Which costs are refundable?

The refund covers VAT paid on goods and services directly related to constructing the new residence. Not every expense qualifies.

Eligible expenses

• Contractor fees for building the structure
• Architect and engineering consultancy fees
• Building materials purchased from VAT-registered suppliers
• Electrical, plumbing, and HVAC installation
• Landscaping that forms part of the original construction contract
• Interior fit-out costs included in the initial build scope

Ineligible expenses

• Furniture and movable appliances
• Land purchase costs (bare land is exempt from VAT)
• Maintenance or repair work after completion
• Professional fees unrelated to construction, such as legal or brokerage fees
• Any costs where the supplier is not VAT-registered or did not charge VAT

Keep every tax invoice. The FTA will reject claims that lack proper documentation.

Step-by-step process to file the refund

The FTA handles the entire process through its online portal. There is no paper-based option. Below is the typical workflow.

Step 1: Gather documents

Before starting the application, collect the following:

• Copy of your Emirates ID and UAE passport
• Title deed or Affection Plan (Oqood for off-plan) showing ownership
• Building completion certificate issued by the relevant municipality
• All original tax invoices from VAT-registered suppliers, each showing the supplier's Tax Registration Number (TRN)
• Proof of payment for each invoice (bank statements or receipts)
• A summary schedule listing every invoice, supplier TRN, date, amount, and VAT charged

Step 2: Create or log in to your FTA account

Visit the FTA e-Services portal. If you do not have an account, register as an individual. You do not need a TRN to apply for this refund.

Step 3: Submit the refund application

Navigate to the VAT refund section for UAE nationals on new residences. Fill in the property details, upload all supporting documents, and enter the total VAT amount claimed. Double-check every figure against your invoices.

Step 4: FTA review

The FTA reviews the application. Processing typically takes several weeks. The authority may request additional documents or clarifications. Respond promptly to avoid delays.

Step 5: Receive the refund

If approved, the FTA transfers the refund to the bank account you specified. If partially approved, the FTA explains which invoices were rejected and why.

Common mistakes that delay or block refunds

Many applicants face rejection on their first attempt. Avoiding these errors saves time.

1. Missing or invalid tax invoices. Every invoice must meet the FTA's tax invoice requirements, including the supplier's TRN, a description of the supply, and a separate VAT line.
2. Claiming ineligible costs. Furniture, appliances, and post-completion maintenance are not covered. Including them triggers a review of the entire claim.
3. Filing after the deadline. You have 12 months from the building completion date. Late applications are rejected outright.
4. Incorrect bank details. The bank account must be in the applicant's name. Joint accounts may cause issues.
5. No completion certificate. The municipality completion certificate proves the building is new and finished. Without it, the FTA cannot process the claim.

How much VAT can you recover?

The UAE charges VAT at a standard rate of 5% on taxable supplies. The refund equals the total VAT correctly paid on eligible construction costs.

Worked example

Expense category	Cost before VAT (AED)	VAT at 5% (AED)	Refundable?
Main contractor	1,500,000	75,000	Yes
Architect fees	120,000	6,000	Yes
Electrical and plumbing	200,000	10,000	Yes
Landscaping (original build)	80,000	4,000	Yes
Furniture	150,000	7,500	No
Land purchase	800,000	0 (exempt)	N/A
Total refundable VAT		95,000

In this example, the UAE national recovers AED 95,000. The furniture VAT of AED 7,500 is excluded because movable items are not part of the building.

Key deadlines and timelines

Milestone	Deadline or timeframe
Building completion	Date on the municipality completion certificate
Refund application deadline	Within 12 months of completion
FTA processing time	Typically 20 business days, but may extend if documents are incomplete
Refund payment	Within 5 business days of approval, per FTA guidelines

Interaction with VAT registration and deregistration

This refund scheme is designed for individuals, not businesses. If you are a VAT-registered business that constructs residential property for sale, the input tax recovery rules differ. You would claim input tax through your regular VAT return instead.

If you are considering closing your VAT registration after a property transaction, read our guide on VAT deregistration in the UAE. You may also need a VAT clearance certificate before the FTA cancels your registration.

Frequently asked questions

Below are answers to common questions about claiming a VAT refund on new residential properties in the UAE.