UAE grants $790 million in tax refunds for nationals building new homes and expands VAT waivers for tourists

The UAE has announced significant progress in its VAT refund initiatives, highlighting substantial benefits for both UAE nationals constructing new homes and international tourists. The Federal Tax Authority (FTA) revealed that its digital VAT refund systems achieved remarkable results in 2024, driven by continuous advancements in digitalization.

According to the FTA, the cumulative total of VAT refund applications approved for UAE nationals building new residences has reached 34,900, amounting to AED2.9 billion ($790 million). This figure reflects the total refunds processed since the service's launch over six years ago, up until the end of 2024.

Growth in refunds for nationals' housing construction

The cumulative totals mark a significant increase compared to the end of 2023, when 27,000 applications worth AED2.2 billion ($599 million) had been approved. Over the past year, the number of approved applications rose by 27.52%, while the monetary value of refunds increased by 32%.

In 2024 alone, 7,520 applications were approved for UAE nationals, totaling AED704.38 million ($192 million). The growth trend has been consistent since 2018, when 270 applications worth AED9.11 million ($2.5 million) were approved. By 2019, this had surged to 1,900 applications totaling AED121.46 million ($33.1 million).

Subsequent years continued the upward trajectory, with applications and refund values steadily rising:

Expansion of VAT refund system for tourists

The FTA also highlighted the growth of its digital VAT refund system for tourists, emphasizing its impact on retail and hospitality. The number of retail outlets registered under the system increased to 17,847 by the end of 2024, up 9% from 16,357 outlets in 2023. This expansion included 1,490 new retailers joining the system in 2024, building on the 1,518 new additions from the previous year.

Over the last two years, a total of 3,008 outlets have joined the VAT refund system, reflecting the UAE's commitment to enhancing its appeal as a tourist destination.

To streamline refund procedures, the FTA has significantly increased the availability of self-service kiosks. By the end of 2024, the number of kiosks had risen to 97, compared to 82 in 2023, an 18.3% annual increase. These kiosks, located in shopping malls, hotels, and airport terminals, allow tourists to complete tax refund transactions in less than two minutes.

Commitment to digital transformation

Khalid Ali Al Bustani, Director-General of the FTA, emphasized the authority’s commitment to advancing digital systems in line with global best practices and the UAE’s digital transformation strategy.

“Our efforts in digital transformation have positively impacted the quality and performance of VAT refund services, benefiting both UAE nationals and tourists. These systems have undergone successive enhancements to streamline and accelerate procedures, ensuring customer satisfaction,” Al Bustani said.

Looking ahead to 2025, the FTA aims to launch additional initiatives to align with the UAE’s smart transformation strategy, which seeks to reduce bureaucracy and enhance service efficiency through proactive digital solutions.

The FTA’s ongoing efforts reflect the UAE’s broader vision of creating seamless, customer-focused services that foster economic growth and elevate the country’s position as a global leader in innovation and hospitality.