When is value-added tax or real estate disposal tax applied to residential buildings?


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The General Authority for Zakat and Income published a video clip, today (Monday), in which it explained, with a simplified example, the cases in which the value-added or real estate tax is applied, in the event of owning an apartment building or a commercial building.

The authority said that if the owner leases the upper floors in an apartment building as a residential rental; The owner is completely exempt from both taxes and is not obligated to register in them, but in the case of renting the lower floors as commercial stores and the income from the rents exceeds 375 thousand riyals, then in this case he is obligated to register.

It added that the owner must register for VAT; If the annual income from the rents of the shops that he owns is more than 375 thousand riyals, he is also required to collect the tax from the tenants and raise it on the Authority’s website on a quarterly basis.