Real Estate Transaction Tax (5%) in Saudi Arabia — A Complete 2025 Guide

An updated practical guide to Saudi Arabia’s 5% Real Estate Transaction Tax (RETT) — covering taxable cases, first-home exemptions, registration steps via ZATCA, quick calculation examples, and official references from professional sources.

Real Estate Transaction Tax (5%) in Saudi Arabia — A Practical and Updated Guide

The Real Estate Transaction Tax (RETT) is a 5% tax imposed on real estate transactions, including ownership transfers or long-term usufruct rights. The regulatory framework was formalized under the Real Estate Transaction Tax Law and its executive regulations, effective from April 9, 2025.

What Transactions Are Subject to the Tax?

  • Sales, ownership transfers, non-exempt gifts, certain financing forms (lease-to-own, murabaha), and usufruct rights exceeding 50 years.
  • Transfers of company shares that own real estate may also be taxable under specific conditions in the executive regulations.

Rate, Tax Base, and Who Pays It

The tax is calculated at 5% of the property’s transaction value (not less than its fair market value). By default, the seller (transferor) is responsible for payment before or during title transfer via the ZATCA Real Estate Transaction Registration Service.

Main Exemptions and Exceptions

  • First Home for Citizens: The government bears the 5% RETT up to SAR 1,000,000 of the purchase price, based on eligibility through the “Sakani” program.
  • Specific exemptions apply to cases such as in-kind contributions to real estate investment funds or transfers to licensed off-plan developers, as defined by ZATCA updates.

Practical Steps Before Title Transfer

  1. Register the transaction through the Real Estate Transaction Registration service on ZATCA’s portal.
  2. If applying under the First Home benefit, obtain a Subsidy Certificate from “Sakani.”
  3. Review ZATCA’s official guides to ensure all requirements and documents are complete.

Quick Calculation Examples

Case Transaction Value Calculation Notes
Apartment Sale SAR 800,000 Tax = 5% × 800,000 = SAR 40,000 Usually paid by the seller through ZATCA’s electronic service.
Citizen’s First Home Purchase SAR 1,500,000 Government covers 5% up to 1,000,000 = SAR 50,000 Requires a Subsidy Certificate from “Sakani.”

Relationship with VAT

With the introduction of the RETT, real estate sales are generally outside the VAT scope, though VAT may still apply to certain real estate services. Always consult ZATCA’s VAT guidelines for mixed transactions.

Verified References and Sources

  • RETT Simplified Guide — ZATCA
  • RETT Platform User Manual — ZATCA
  • Real Estate Transaction Registration Service — ZATCA
  • Executive Regulation Updates — ZATCA News
  • “Sakani” First Home Program — Ministry of Municipal and Rural Affairs and Housing
  • Professional Reports on RETT Implementation (April–May 2025): KPMG, EY, and PwC
Disclaimer: This content is for general awareness purposes on the “Almanazl” platform and does not constitute legal or tax advice. Always refer to official ZATCA publications and regulations before completing a property transfer.

 

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