Where a UAE national owns or acquires land in the UAE on which he builds his own residence, he shall be entitled to make a claim to the FTA to repay the Tax on the expenses of constructing the residence [Executive Regulations article 66]
What is recoverable?
Such expenses can be claimed:
Cost of construction and building materials normally used in a residential building but not including furniture or electrical appliances
Unfitted appliances and furniture are excluded and can’t be claimed
How to claim?
The claim must be submitted to FTA within 6 months of the earlier of:
The date of the completion certificate
The date of occupation by the owner or his family
FTA Conditions to claim VAT
A claim will only be valid if all the following conditions are met
The claimant must be a UAE national and cannot be a company
The claim must be related to the construction of a new building for the claimant or his family
The building must be for residential use only, it cannot be a hotel or hospital which includes residential accommodation
The building must be built with the intention to be used solely as a residence for the occupant or his family (if occupant plans to use the house for a year and then rented out, it will not qualify for input VAT refund)
If the last condition is breached the FTA may claim back any refunded input VAT.
Record keeping of all expenditures on a cloud accounting system.
Clearly identify and record the refundable and non-refundable VAT
Cloud storage for all legal, supporting documents, and contracts.
Provide online and mobile app to the property owner to track overall expenditure and refundable VAT.