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Saudi Arabia exempts 15% Value Added Tax (VAT) on real estate transactions and impose a new 5% tax on property deals as per the Royal order issued by The Custodian of the Two Holy Mosques King Salman bin Abdulaziz.
The royal decree states imposing a tax in the name of real estate disposal tax on supplies of real estate at a rate of 5% of the supply, which is to be collected upon documenting the real estate disposal. – The order also aimed to support Saudi citizens who wants to buy homes said the Finance Minister of the Kingdom of Saudi Arabia.
Saudi government to bear the tax of real estate transactions for no more than 1 million riyals from the purchase price of the first home of the Saudi citizen.
The Royal order aims to support nationals and ease their burden and allow them to own homes, and helps in developing the kingdom’s economy by spurring the residential and commercial property sector said the Finance Minister Mohammed Al Jaddaan.
While the Housing Minister said this move would help in achieving a target of boosting housing ownership by Saudi nationals to 70% by 2030 in the kingdom with an overwhelmingly young population
The General Authority for Zakat and Income announced that it will start next Sunday, 4th October, to exempt all real estate supplies made by sale from 15% value-added tax, and to impose a 5% real estate disposal tax, which is defined as “any legal act that transfers ownership Real estate or its possession, including: sale, donation and bequest, barter and lease, finance lease, transfer of shares in real estate companies, and increasing the value of the amount that the state will bear as consideration for the tax due for the first housing of citizens from 850,000 riyals to one million riyals, with the application of bearing on Real estate disposal tax.