FTA Expands VAT Refund Scope for Emirati Homebuilders to Lower Costs

The UAE Federal Tax Authority (FTA) has officially expanded the categories of construction expenses eligible for Value Added Tax (VAT) refunds for UAE nationals. The updated regulations broaden the scope of costs that citizens can reclaim when building new private residences, effectively reducing the overall financial burden of home construction. New Eligible Expense Categories The expanded scope now includes a wider variety of building materials and essential installations. Under the updated criteria, UAE citizens can claim VAT refunds on central air conditioning systems, water heaters, and built-in appliances. The FTA confirmed that the refund applies not only to the purchase price of these items but also to the labor costs associated with their installation and testing. To qualify for the refund, the property must be a newly constructed building intended for use solely as a private residence by the applicant or their family. The scheme excludes commercial properties or units intended for rental or investment purposes. Application Timeline and Requirements The FTA stipulates that refund applications must be submitted within 12 months of the date the construction is completed or…