According to the UAE’s value-added tax, the UAE government has proposed a VAT refund plan for UAE nationals to build new homes. Let us learn more about the new residential VAT refund program.

What is the VAT refund plan for UAE nationals for new residents?

The new residence value-added tax refund scheme is applicable to UAE nationals who have newly constructed buildings that are only used by individuals or their families as their residences. This applies when the person owns or acquires land on which to build or commission his own residence in the UAE. According to the plan, the person will have the right to request a refund of the tax paid on the cost of building the house.

What are the conditions for being eligible for this program?

To qualify for this program, the following conditions must be met:

Claims should be made by natural persons who are UAE nationals.

b. The claim should involve a new building that is only used as the residence of the person or the person’s family.

c. No claims should be made against buildings that are not used solely as homes for individuals or their families.

For example: hotels, hotels, hospitals, etc.

When can a refund request be made?

The refund application under the plan should be submitted within 6 months from the date of completion of the new residential building. Newly built residences are considered to be on the date the residence is occupied or the date when the UAE competent authority certifies its completion (whichever is the earlier).

What are the fees that can be refunded?

According to this plan, the fees that can be claimed to be refunded for VAT paid are:

The services provided by the contractor include the services of builders, architects, engineers and other similar services required for the successful construction of houses.

b. Building materials are a type of goods that builders usually mix in residential buildings or their sites. This does not include furniture or appliances.

What if the person later uses the property for commercial purposes?

If a person who requires the refund of the VAT under this program later uses it for commercial purposes, he/she will need to repay the tax refunded earlier.

The new residence value-added tax refund scheme is an attractive plan for UAE nationals who are newly constructing residences in the UAE. They can reduce the expenditure incurred by the value-added tax paid for the construction of new houses. This is also a measure of the UAE government to assist UAE nationals in the construction of houses. UAE nationals can pay attention to the conditions of the plan and use them for their own benefit.

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