Housing stability is at the top of the UAE's National Development plan, and with the introduction of the United Arab Emirates tax system, the Federal Tax Authority is paying special attention to lifting the financial burden off the shoulders of citizens and residents of the country, in particular where commercial real estate supplies (rented or purchased) are subject to a basic VAT rate of 5% while residential real estate is generally exempt from tax, except for the first supply during the first three years of its construction, which is subject to zero tax.

In this context, and guided by the vision of the wise leadership of the country, the FTA is determined to implement tax legislation that aims to enhance the well-being and happiness of citizens through the development of clear and transparent mechanisms that facilitate VAT refunds for UAE nationals on the expenses incurred related to building new homes, in a step to creating a modern housing system for citizens, providing them with the best standards of life, and making their wellbeing the centerpiece of development plans and the main objective of all initiatives and projects implemented by UAE institutions.

Since the introduction of the VAT refund mechanism in 2018, the Authority has carried out several upgrades by introducing more facilities to simplify and speed up the refund procedures. The FTA has launched an improved electronic platform for VAT refunds by coordinating with housing programs in the country that apply the procedures required by FTA and supply the required expenditure data. This reduces the requirements for scrutiny of requests for refunds submitted by citizens on the basis that the competent authorities, in cooperation with the FTA, provide the necessary assurances to support the refund requests.

To gain maximum benefits from the various initiatives and facilities provided by the FTA, citizens who meet the legal requirements for VAT refunds for the construction of their new homes are invited to apply through the online platform and carry out the required application procedures after reading and understanding the updated guidelines available on the FTA website, which include a comprehensive explanation of the simplified procedures for filing a tax refund application for new homes and details on tracking the status of the application.

The procedure is clear and easy to follow: after the application has been submitted, the individual eligible for the VAT refund receives a notice asking him or her to submit the documents necessary to complete the Authority's VAT refund process. After verification of the documents, the citizen is notified of his or her entitlement and of the conformity of the refund amount with the tax invoices submitted. After final approval, the refund amount is transferred directly to the applicant's bank account.

Khalid Ali Al-Bustani,

Director-General, UAE Federal Tax Authority