1Version 6 | May 2026

Implementation of the Real Estate Transaction Tax Law in the Kingdom Royal Order No. (A/84) was issued on 14/02/1442 H, stipulating the exemption of supplies of real estate—made as a way of transferring its ownership, or the right to transfer therein as an owner—from Value Added Tax (VAT). Concurrently, the Real Estate Transaction Tax (RETT) was imposed on sales and the like at a rate of %5 of the value of real estate. This measure aims to support citizens and licensed real estate developers, and to contribute to the achievement of the state’s targets by increasing the rates of real estate ownership.  Furthermore, the amount borne by the country from the value of the Real Estate Transaction Tax was increased, as the state will bear the RETT for amounts not exceeding one million SAR from the purchase price of the citizen’s first home. This is in comparison to the amount incurred in the VAT for not more than 850,000 SAR prior to the issuance of the Royal Order. The tax was implemented starting from 14/02/1442 H (corresponding to October 4, 2020) in accordance with the Implementing Regulation of the Real Estate Transaction Tax issued by His Excellency the Minister of Finance No. (712) dated 15/02/1442 H.  On 19/03/1446 H, Royal Decree No. (M/84) was issued, approving the Real Estate Transaction Tax Law. This Law entered into force and became effective on 12/10/1446 H (corresponding to April 10, 2025)—the Law’s effective date. Additionally, the Board of Directors of the Zakat, Tax and Customs Authority (ZATCA) issued its Resolution No. (25-03-01) dated 24/09/1446 H (corresponding to March 24, 2025), approving the Implementing Regulations necessary for the Law’s execution, which entered into force simultaneously with the Law’s effective date. 1.2. Zakat, Tax and Customs Authority (ZATCA) The Authority is the body charged with the implementation, administration, and collection of the Real Estate Transaction Tax, hereinafter referred to as the “Tax” unless the context otherwise requires. According to its mandate, the Authority’s tasks center on the collection of Zakat, taxes, and customs duties, and achieving the highest levels of compliance by taxpayers with their obligations in accordance with best practices and high efficiency. It also regulates and manages all activities related to customs work and customs ports to ensure their advancement to the highest degree of efficiency, productivity, and competitiveness. In addition to its legally prescribed powers and without prejudice to the powers and responsibilities of other entities, the Authority may undertake all necessary actions to achieve its objectives.