Latest news with #RealEstateTransactionTax
Arab News
10-04-2025
- Business
- Arab News
Saudi Arabia introduces 5% tax on real estate transactions
JEDDAH: Saudi Arabia has introduced a 5 percent Real Estate Transaction Tax, effective from April 10, as part of its economic diversification efforts. The new tax, the Zakat, Tax and Customs Authority said, will apply to all real estate transactions across the Kingdom, including residential, commercial, and industrial properties. It will be levied regardless of the property's development status, usage, or whether the transfer involves full or partial ownership. It will also apply to undocumented transactions. To comply with the new regulation, all property transfers must be registered through the RETT platform on ZATCA's official website. Parties involved in a transaction will need to declare property details and any applicable exemptions before formalizing the transfer at a notary or legal authority. The introduction of the RETT is part of Saudi Arabia's broader strategy to foster growth in the real estate market, with expectations for significant expansion in 2025. In a recent report, real estate services firm JLL highlighted strong economic growth across the Gulf region, with Saudi Arabia leading the way. The Kingdom's non-oil sector is expected to grow by 5.8 percent in 2025, up from 4.5 percent in 2024. The construction sector performed well in 2024, with project awards totaling $29.5 billion. Furthermore, the Saudi real estate market is projected to reach $101.62 billion by 2029, growing at an annual rate of 8 percent from 2024. ZATCA stated on its official X account that the RETT regulation is designed to create a clear legal framework, foster growth in the real estate sector, attract investment, and enhance tax exemptions for economic, social, and regulatory goals. The new rules also aim to address challenges specific to the real estate industry. The newly approved regulations provide clarity on property transactions subject to tax, establish mechanisms for tax calculation, and outline payment procedures. They also introduce measures to ensure fair market value verification. Notably, the fine for delayed tax payments has been reduced from 5 percent to 2 percent. Exemptions include property transfers resulting from inheritance divisions, registered public and private endowments, and transfers between spouses or relatives up to the third degree.
Gulf Insider
09-04-2025
- Business
- Gulf Insider
Saudi Arabia's Real Estate Transaction Tax is A Game-Changer
Saudi Arabia's new tax rules on real estate transactions have taken effect, offering a significant boost to property ownership among its citizens. At the same time, the full benefits of the update Real Estate Transaction Tax will extend across all layers of deal-making in the sector, according to industry sources. The RETT brings in a flat 5% tax on most real estate transactions, 'including sales, transfers, and other property-related dealings, regardless of whether the parties are individuals or businesses'. The updated RETT came into effect Wednesday (April 9). When it comes to individual investors, there are specific exemptions, according to Naveen Sharma, Chairman of the Taxation Society. Family-related transfers: Transactions such as gifts between close relatives (up to the third degree), inheritance divisions, and spousal transfers are exempt from the 5% tax obligation. First-time homebuyers: Saudi citizens purchasing their first residential property are exempt from tax on properties valued up to SR1 million, with the government covering the tax for qualifying transactions2. Other exemptions: Transfers to charitable organizations, endowments, or under certain governmental housing initiatives are also RETT-exempt. 'While individuals are subject to the RETT on property transactions, these exemptions significantly reduce the tax burden for specific scenarios, particularly for Saudi nationals and family-related transfers,' said Sharma. Saudi Arabia has brought in a wave of reforms across its property market, the latest being measures taken to speed up availability of land for development and stabilize rentals in Riyadh. Then, there has also been the opening of freehold rights to foreign investors, the gains from which are starting to show up. These moves to open up the property market are backed by newly updated and transparent tax laws, which is what the RETT is all about. 'The new RETT marks a transformative step in Saudi Arabia's real estate market,' said Sharma.
