Property transfer tax - The Zakat, Tax and Customs Authority clarified that the transfer of property ownership It is subject to a real estate transaction tax of 5% of the total property value, whether sold or transferred, starting from October 4, 2020.
The Authority indicated, via its official account on the "X" platform, that this tax includes all types of real estate, regardless of its condition, type, or use at the time of sale, unless it is exempt under the rules and regulations.
Details of property transfer and real estate transactions tax
The tax rate is 5% of the value of the property to be sold or transferred, and includes:
Lands of all kinds.
Buildings, structures, and anything constructed, created, or built on land.
The taxpayer must pay the tax before or during the real estate transfer or upon notarizing the contracts with the competent authorities.
The legal basis of the decision
The real estate transaction tax was imposed pursuant to Royal Order No. (A/84) dated 14/2/1442 AH, as part of the state’s commitment to supporting the nation’s sons and daughters, alleviating their burdens, and providing sustainable solutions that meet their needs and achieve their well-being.
The decision also stipulated exempting real estate sales from value-added tax (15%), while raising the support limit allocated for the first home tax for citizens from 850 riyals to one million riyals, in a move that reflects the leadership's keenness to enable Saudi families to own suitable housing.
Tax objectives
This step aims to:
- Promoting tax fairness in the real estate market.
- Regulating sales and transfer of ownership.
- Supporting citizens in home ownership through special exemptions and facilities.
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