UAE VAT Refund Process for New Residences Announced by FTA

The Federal Tax Authority (FTA) has announced the 3-step procedure for UAE nationals for claiming the refund of the VAT paid on the construction of new residential properties-

There are certain conditions which the taxpayer needs to fulfill in order to be eligible for VAT refund. These conditions are:

  • Applicant must be a UAE citizen;
  • The amount in question must have been used to finance the construction of a new residential property in the UAE, which is intended to be used exclusive for resident purposes by the owner or their family. Also, the contractor services must be a part of the construction project;
  • Only the VAT paid on expenses on establishing the residential unit, such as the purchase of building materials and other products used by contractors for construction, are eligible to get a refund.

The FTA further explained that the application for refund must be submitted within six months from the date of completion of the project, which should be before the date of occupancy, or the date when a certificate of completion was issued by the respective authorities, or any other date as mentioned by the FTA, whichever is earlier.

“The Authority has been providing transparent standards, procedures, and mechanisms to ensure seamless procedures for citizens looking to recover VAT incurred on the construction of new residences. This, in turn, leads to achieving the vision of our wise leadership to develop a modern, stable housing system in the UAE,” said Khalid Ali Al Bustani, director-general, FTA.

The FTA has also confirmed that it is not charging any fees on requests for VAT refund on the construction of new residential units, however, the accredited certification bodies may charge a fee for their services.

How to claim VAT refund on new residences?

Those who are eligible for a VAT refund on newly constructed residential properties can follow the steps below to claim VAT refund.

Step 1: VAT Refund Form

Download the VAT refund form from the official website of the FTA. Fill in the details, print and sign it.

Step 2: Form Submission

Scan the completed form and supporting documents and make a PDF file. Send the form PDF to homebuilders@tax.gov.ae as your VAT refund application. The supporting documents to be attached to the form include:

1. A copy of the applicant’s passport
2. A copy of their Emirates ID
3. The paperwork relating to the ownership of the property (land) in question, which must mention the date of completion

Applicants will receive a verification mail upon receipt of the application.

The VAT applications are usually processed within five working days, and applicants are sent an email to inform them about the status (rejected/approved) of their application.

Step 3: Refund of VAT

Applicants, who are declared eligible for a refund, will have to submit the refund request, along with the reference number (of the application sent earlier), property blueprints, and related purchase invoices to an accredited verification body assigned by the FTA.

The verification entity will evaluate your refund request and produce a “Verification Report” mentioning the total VAT amount and the VAT amount eligible for a refund and send the report to the FTA. The FTA may take up to 20 working days to further process the refund request and five more days to refund the eligible amount to the applicant.

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