Saudi Arabia’s real estate sector is key to achieving long-term economic growth aligned with Vision 2030. Through initiatives that facilitate home ownership, advance urban development, and enable private sector growth, the Kingdom is shaping a dynamic and resilient real estate sector that supports national progress.
As part of these efforts and to mitigate the tax burden on the real estate sector, Royal Decree No. (A/84) was issued in October 2020, introducing a new real estate transaction tax (RETT) at a rate of 5 percent to replace the 15 percent VAT on real estate transactions. Since then, a dedicated law and updated implementing regulations have further refined the RETT framework.
All real estate transactions taking place after 4 October 2020 will be subject to RETT, although exemptions are provided in the law and regulations. While RETT has helped reduce transaction costs and stimulate market activity, it also introduces obligations for taxpayers, including:
- Accurate valuation and registration of real estate transactions
- Timely payment of RETT upon submission of the transaction
- Proper maintenance of supporting documents
