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Logo of Zakat, Tax and Customs Authority (ZATCA)
The Zakat, Tax and Customs Authority (ZATCA) introduced several exemptions to the executive regulations of the real estate transactions tax, which came into effect on Aug. 19.
The amendments included a number of exemptions, mainly the disposal of real estate transactions by any person to a licensed developer for the purpose of sale and rental activities on off-plan properties.
Exemptions were also related to natural persons that fully own companies, provided that their ownership shall remain unchanged for at least five years.
Transactions between companies owned by the same person are also exempt, provided there is no change in percentage of ownership for a period of no less than five years.
Disposals to charitable organizations are also exempt, provided there is no change in percentage of ownership for a period of no less than five years.
Exemptions also apply to a property returned to the previous owner due to the cancellation of documented real estate disposal by mutual consent between its parties. This is within a period not exceeding 90 days from the date of the real estate disposal tax documentation, provided that there is no change in the description of the property and a full refund of its value.
The real estate disposal tax is imposed at a rate of 5% of the total value of the real estate disposal, according to which the ownership of the real estate is transferred from a person or establishment to another person or establishment. This is either through sale, exchange, gift or similar other real estate transactions, with the presence of some exempted actions, Argaam earlier reported.
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