1Version 6 | May 2026

Transaction of interests in Real Estate Companies that Do Not Reach the Threshold for Taxable Real Estate Transactions A Real Estate Company is defined as every company, fund, or entity that directly or indirectly owns real estate within the Kingdom with the aim of generating revenue from selling or leasing it, provided that the total fair market value of such real estate is not less than (50%) of the total fair market value of its assets, at the date of the interest transfer or at any time during the period of three hundred and sixty-five (365) days preceding the date of the interest transfer. The transaction of interests shall be deemed a real estate transaction if a person or a group of persons acting in concert transfer a total interest of (30%) or more of the interests of a real estate company through one transaction or a series of related transactions within a period of three years. In such a case, these transactions shall be treated as a taxable real estate transaction; otherwise, it shall not be considered a taxable real estate transaction and shall therefore fall outside the scope of the tax. Example (1) One of the partners in Company (A) — a real estate company according to the provisions of the Real Estate Transaction Tax Law — by transferring his entire interest of (9%) in the company by selling that interests to investor (Ahmed); this transaction is deemed a non-taxable real estate transaction. Example (2) One of the investors in Company (A) transferred interests he owns in a real estate company during separate time periods not exceeding three years, where (10%) of his interests were transferred in January 2023, then (15%) of the interests were transferred in June 2024, and in June 2025 he transferred another (10%) of the interests, bringing the total transactions within the three years to (35%) of the real estate company’s interests. The tax shall be due on these transactions as of the date of the last transaction in June 2025, which is the date on which the transactions reached (35%) of the real estate company’s interests. It must be taken into account that for a transfer of interests in a real estate company to be taxable, it is required that the interest holder’s ownership in the company’s interests has reached (30%) or more, and that the transfer itself involves (30%) or more of the real estate company’s interests—whether through a single transaction or through multiple linked transactions. In the event that neither of these two conditions is met, the transfer of ownership of those interests is not considered a taxable transaction.