New residence VAT Refunds in UAE
UAE Nationals Building New Residences: How does it work?
Where a UAE National owns or acquires land in the UAE on which he / she builds or commissions the construction of his / her own residence, he / she is entitled to request a special refund from the FTA for the VAT incurred on certain expenses related to the construction of a new residence, subject to certain conditions stated in Article 66 of the Executive Regulation.
What is the meaning of ‘residence’ for VAT purposes?
The term ‘residence’ refers to any building (including townhouses and villas) used predominantly as a private home of a natural person, including fixtures and fittings belonging thereto and enjoyed therewith, which comprise at least of cooking and washroom/bathroom facilities in addition to sleeping quarters.
Any subsequent attachment to the residence or detached structures subsequently built on the same plot would not be regarded as a ‘residence’ for the purposes of the New Residences Refund Scheme, unless that attachment/detached structure meets the definition of ‘residence’ stated above on a standalone basis.
Buildings and units registered for commercial purposes, including hotel apartments, do not qualify as ‘residences’ for purposes of the New Residences Refund Scheme.
Who is eligible?
The claim may only be made by a natural person who is a national of the United Arab Emirates and holds a Family Book.
Criterion relating to the usage of the building:
Expenses must relate to a newly constructed building which is to be used solely as a residence of the applicant and/or his or her family.
Criteria relating to the nature of expenses:
VAT may be recovered in respect of the following categories of expenses:
- Building materials, being goods of a type normally incorporated by builders in a residential building or its site, but not including furniture or electrical appliances; and
- Services provided by contractors, including services of builders, architects, engineers, and other similar services necessary for the successful construction of a residence.
VAT incurred on transport costs and clearing agent fees on importation of building material may be recovered to the extent these costs are incurred directly in connection with building materials to be used for constructing a private residence for a UAE citizen or his family.
Goods and materials are normally considered to be incorporated into a building when they are fixed in such a way that the fixing or removal of those goods would require the use of tools or result in the need for remedial work to the fabric of the building, or cause damage to the goods/materials themselves
Deadline for the application
The Refund Request must be sent to the FTA within 12 months from the date of completion of the newly built residence which is the earlier of the date:
- the residence becomes occupied; or,
- when it is certified as completed by a competent authority in the UAE (the Building Completion Certificate).
All applications for New Residence VAT Refunds must be submitted via the FTA e-services portal.
- Copy of the applicant’s Emirates ID
- Copy of the applicant’s Family Book
- Copy of the property completion certificate and building permit
- Copy of your property site plan
- Documentary proof to support that you own the plot of land in the UAE
- Copy of the letter/certificate issued and stamped by your bank which includes details such as the account holder’s name, bank’s name and the IBAN
- Other documentation to support the date the building is occupied (if required).
Applying for New Residence VAT Refund
Reviewing the progress of your New Residence VAT Refund Request
Expense items eligible / not eligible for refund
Latest insights, case studies and news from across the network
Eliminate VAT Return Filing Worries: Answering Common FAQ's
Value Added Tax (VAT) is a consumption tax that is applied to most goods and services in the United Arab Emirates (UAE). Businesses that are registered for VAT are required...
Essential FAQs: Understanding and Complying with Corporate Tax in the UAE
As the United Arab Emirates (UAE) embarks on a new era of fiscal policy, the introduction of corporate tax marks a pivotal moment in the nation’s economic trajectory. This comprehensive...
Essentials of VAT Compliance for Businesses in the UAE
VAT compliance is a crucial aspect of doing business in the UAE. For businesses of all sizes, it is essential to understand the technical requirements of VAT compliance in order...