Real Estate Transaction Tax Law broadens exemptions: ZATCA

Hamoud Al-Harbi, Spokesperson for the Zakat, Tax, and Customs Authority (ZATCA), said the Real Estate Transaction Tax (RETT) Law introduces more tax exemptions, directly benefiting Saudi Arabia's real estate sector.

Speaking on the sidelines of the Zakat, Tax, and Customs Conference, Al-Harbi told Argaam that the law is poised to drive both social and economic progress and introduce a clear regulatory framework for the sector, noting that it imposes a fixed tax rate of 5% on real estate transactions.

He highlighted new exemptions, including indirect real estate transactions related to trading and investment funds, mergers and acquisitions, and compulsory court-ordered transactions.

Al-Harbi went on to say that one of the key features of the updated system is a reduction in penalties for evasion or non-payment from 5% to 2%. Additionally, the statute of limitations for tax claims has been reduced to three years, reflecting greater flexibility in handling tax-related cases.

The law seeks to enhance transparency in the real estate market and encourage tax compliance, which contributes to enhancing the sector's growth and achieving economic sustainability.

Last October, Umm Al-Qura newspaper published the Cabinet’s decision to approve the RETT law (in detail), according to the data available on Argaam.