1Version 6 | May 2026

Real Estate Transactions Subject to Tax Only Once In principle, tax is imposed only once when there is unity of the parties to the transaction, unity of the real estate, and unity of the value. This includes transactions resulting from Murabaha contracts and Finance Lease; where the first transaction—from the owner to the licensed financing entity—is subject to tax, and the tax shall not be imposed again on the subsequent transaction if the following conditions are met: y The first transaction is subject to tax. y The transaction event is included within the financing contracts issued by the financing entities, specifying the transactions, the real estate, and the value. y No change in the description of the real estate and its value as specified in the aforementioned financing contracts. This means that the return of ownership from the financing entity to the customer—pursuant to the same contract and without change in the description of the contract or the value—does not create a taxable real estate transaction. That is, this subsequent transaction is outside the scope of tax imposition. Example (6) A customer wishes to purchase an apartment from a real estate development company for an amount of SAR 1,000,000 under a Finance Lease contract. Accordingly, the bank purchases the apartment from the company and pays the due tax on this sale. The customer then pays the value of the apartment in monthly installments. Upon the expiration of the contract, the ownership is transferred to the customer without imposing a new tax, as the first sale is the one that was subject to tax, while the final transfer of ownership is considered an execution of the financing contract for which the Real Estate Transaction Tax (RETT) has already been paid, and it does not create a new real estate transaction. 4. Due Date of Real Estate Transaction Tax 4.1. Imposition of Real Estate Transaction Tax Real Estate Transaction Tax (RETT) is imposed at a rate of 5% of the total purchase price for each transaction separately. Consequently, if the transaction is repeated on the same property, the purchase price for each transaction is subject to RETT at a rate of 5%, unless the transaction is exempt from tax according to the list of exemptions stipulated in the RETT Law and its Implementing Regulations, which will be mentioned later in detail. This applies regardless of whether the transaction is notarized or not, as the general rule for tax due date is the occurrence of the tax-triggering event, which is the transfer of the right to others. Example (7) Two persons agreed on the sale of a commercial property and the transfer of its title deed in favor of the buyer at the Notary Public on April 15, 2025, provided that the value of the property is equivalent to the Fair Market Value (SAR 800,000). The sale of the property and its transfer are considered a taxable real estate transaction at a rate of 5%. A tax of (SAR 40,000) is due on the transaction, to be paid on or before the date of notarization with the Notary Public or the Accredited Notary 4.2. Tax Base for Tax Calculation The tax base for Real Estate Transaction Tax (RETT) is determined based on the value agreed upon between the parties to the transaction, provided that the agreed value is not less than the Fair Market Value on the date of the transaction. The taxable value includes all inseparable elements of the real estate, including any licenses, original or accessory real rights, or similar rights closely linked to the real estate, and they are considered part of the total taxable value. The value of the real estate does not include the implicit profit margin if the transaction is part of any legally licensed financing cases. The Fair Market Value is based on a comparison with similar and simultaneous sale cases of similar real estate conducted between independent, unrelated persons within the ordinary course of business, provided that the Authority t