ZATCA approves new real estate tax rules

Logo of Zakat, Tax and Customs Authority (ZATCA) 

Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) approved today, April 9, the executive regulations for the Real Estate Transaction Tax (RETT). The new rules, made up of 15 articles, will take effect on April 10, 2025.

The regulation aims to establish a clear legal framework for RETT, support real estate sector growth, attract investment, expand tax exemptions for economic, social, and regulatory purposes, and address sector-specific challenges.

The RETT rate remains at 5%, applying to all real estate transactions. This includes all property types, regardless of form, usage, or completion status, whether the transaction involves an entire property or part of it, documented or not.

The taxable amount is the agreed-upon value, cash or in-kind, provided it aligns with fair market value, subject to certain exceptions detailed in the regulation.

Article 3 outlines exemption cases, including inheritance divisions, registered public and private endowments, and property transfers between spouses or relatives up to the third degree.