UAE Refunds $872 Million in VAT to Citizens Building New Residences

Since its launch 8 years ago, the UAE Federal Tax Authority’s (FTA) VAT refund program for citizens building new homes has approved approximately 38,000 applications. Between June 2024 and June 2025, the FTA processed over 7,000 new applications, refunding AED 653.1 million. In the first half of 2025 alone, 3,097 applications were approved, returning AED 284.77 million to UAE nationals — a 22.7% increase in applications and a 25.7% rise in refund amounts compared to the previous year.

This program eases the financial burden of residential construction for UAE nationals while boosting the construction sector. As more citizens benefit from these refunds, the demand for construction services, materials, and labor grows, creating a steady flow of projects for contractors across the UAE.

The FTA’s digital tax refund system for tourists has grown significantly, connecting 18,410 retail outlets by June 2025, up from 17,720 at the end of 2024 and 17,080 by June 2024. In the first half of 2025, 697 new outlets joined, a 29% increase compared to the 540 outlets added during the same period in 2024. Over the past two years, a total of 3,390 outlets have been integrated into the system.

The FTA operates 96 self-service machines located in shopping malls, hotels, and departure points. They process tourist refunds in about two minutes per transaction. In December 2024, the FTA launched the world’s first e-commerce VAT refund system for tourists, enabling refunds on online purchases made during their stay in the UAE.^[?] This digital platform allows tourists to scan their passports, submit digital invoices, and receive refunds seamlessly, therefore enhancing the UAE’s appeal as a tourist and e-commerce hub.

The UAE’s digital transformation strategy, which focuses on modernizing services through technology, supports these initiatives. The “Maskan” smart application streamlines VAT refund claims for UAE nationals by implementing fully digital, paperless processes. Khalid Ali Al Bustani, Director General of the FTA, emphasized that:

These initiatives reduce bureaucracy and enhance efficiency, benefiting citizens, tourists, and businesses. For construction contractors, the increased refund activity indicates sustained demand for residential projects, reinforcing the sector’s growth alongside the UAE’s economic and digital advancements.