VAT-exempt real estate supplies include ownership transfer, sales: Al-Jadaan

Mohammed Al-Jadaan, Saudi Minister of Finance clarified that the royal decree issued to exempt real estate supplies from value-added tax (VAT) included the supply of real estate as a way of transferring ownership and selling in all its forms, whether residential, commercial, agricultural, or developed and undeveloped lands plots.

He added that the royal decree also granted licensed real estate developers the right to refund the VAT incurred on their inputs of goods and services subject to VAT and associated with real estate that will be exempt from the tax.

For his part, the spokesperson for the Zakat and Income Tax Authority, Hammoud Al-Harbi, told Al Ekhbariya that exemptions from VAT do not include commercial rent.

According to data compiled by Argaam, Saudi Arabia's King Salman issued, on Oct. 2, a royal decree, exempting real estate supplies from VAT of 15% and imposing a 5% real estate transaction tax on property supplies, which are collected upon the registration of the real estate transaction.