FTA approves Dhs 2.54 billion in home-construction tax refunds for UAE nationals

The Federal Tax Authority (FTA) has approved a total of 30,920 applications for Value Added Tax (VAT) refunds worth a total of Dhs2.54 billion submitted by Emirati citizens for taxes incurred on building new residences since the service was launched and until the end of the first half of 2024.

In comparison, by the end of the first half of 2023, the total number of approved applications amounted to 23,340, with a total value of Dhs1.54 billion. This marks a 32.45 percent increase in the number of approved applications and a 65.07 percent increase in the value of refunded amounts over a period of 12 months.

In a press statement issued today, the Authority explained that in the year between the end of June 2023 and the end of June 2024, 7,580 new applications were approved, allowing citizens to reclaim over Dhs1 billion in taxes they paid on building new homes. In the first six months of this year, 3,590 new applications were approved, refunding Dhs336.09 million in taxes.

Khalid Ali Al Bustani, Director-General of the FTA, attributed the significant increase in the number of UAE citizens benefiting from the Tax Refund Scheme for UAE Nationals Building New Residences to increased tax awareness and continuous improvements made by the Authority to the service since its launch six years ago.

“These enhancements include introducing more facilities to streamline and expedite the refund process for UAE citizens who meet the legal requirements for tax refunds,” Al Bustani said. “This initiative is in line with the Federal Tax Authority’s strategy to prioritise citizens’ happiness, as per our wise leadership’s vision to establish and enhance a modern housing system for Emirati citizens and provide them with the highest living standards.”

He noted that the FTA launched its Maskan smart application this year, providing further facilities for UAE citizens to request refunds on VAT incurred on the construction of their new homes with 100 percent digital and paperless procedures. “This allows Emirati citizens to benefit from digitisation efforts and expedite the tax refund process,” he explained. “The initiative forms part of the Authority’s contributions under the Transformational Projects Series, which aims to advance digital services, limit paper consumption, and minimise the number of required documents, among other facilities.”

Al Bustani emphasised the Authority’s ongoing plans to develop the service and continue its campaigns to educate citizens about the streamlined e-services they can use to apply for VAT refunds on building new residences.

“These include virtual meetings to offer consultations and clarifications, answer enquiries, and allow direct communication with FTA staff handling VAT refunds on new homes, which enable taxpayers to complete their transactions as fast as possible,” he noted. “Moreover, the Authority provides videos and guides on its website and social media platforms, which outline the steps required for applying for VAT refunds, from submitting the application along with supporting documents online, to receiving the refunded amount in the applicant’s bank account.”

Statistics from the Federal Tax Authority reveal a notable increase in the number and total value of approved applications since the service was first offered to UAE citizens. The number of approved applications rose from 270 requests worth Dhs9.11 million in 2018 to 1,900 applications worth Dhs121.46 million in 2019.

The number grew further to 3,750 applications valued at Dhs301.35 million in 2020, marking a significant 97.16 percent increase in the number of approved applications and a 148.1 percent uptick in refunded VAT amounts. This upward trend continued, with 5,990 applications worth Dhs467.52 million approved in 2021, marking an annual growth of 59.62 percent in the number of approved applications and 55.14 percent in refunded VAT amounts.

In 2022, the number of approved applications rose to 7,170 requests worth Dhs583.38 million, revealing a growth of 19.61 percent in the number of approved applications and 24.78 percent in refunded VAT amounts. Figures for 2023 indicated continued growth, with a total of 8,250 applications worth Dhs720.12 million approved, marking a 15.06 percent annual growth in approved requests and 23.44 percent in refunded VAT amounts.