Al-Riyadh, 19 September 2024: The Saudi Council of Ministers, during its session held on 17 September 2024, chaired by the Crown Prince and Prime Minister, has approved the Real Estate Transactions Tax System.

The law imposes a rate of 5% on the total value of real estate transactions involving the transfer of property ownership, such as sales, exchanges, or similar transactions.

However, certain transactions are exempted according to the executive regulations, including the distribution of inheritance among beneficiaries, the disposal of property for family or charitable endowments, and the transfer of ownership to licensed charitable associations.

The real estate transaction tax was introduced at the beginning of the year 1442 AH, replacing the 15% VAT on real estate sales.

Additionally, the state’s support for the tax on the first home for citizens increased from 850,000 riyals to one million riyals.

Recent amendments to the executive regulations require all real estate transactions to be registered on the Zakat, Tax and Customs Authority’s real estate transaction portal, with details on the property and the type of transaction specified before documentation with the competent authorities.

For the full story, click here.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit https://www.lexis.ae/lexis-middle-east-law/.