1Version 6 | May 2026

Real Estate Transaction by a public agency in its capacity as a public authority. This exemption was added to allow public agencies that transfer of real estate in their capacity as a public authority—according to the laws that require them to perform such transactions within the framework of public authority (for example: the Ministry of Municipalities and Housing, and the General Authority for State Real Estate)—to transfer in real estate without imposing tax on the transaction subject of the disposal. This applies only to transactions conducted within the framework of the statutory instrument that enables those entities to practice their activities as a public authority, and provided that the real estate transaction is not conducted according to economic or commercial criteria, or both, with the absence of competition with the private sector, to assist them in performing their roles entrusted to them for the benefit of the state, especially since the assignor or the seller is the one who bears the Real Estate Transaction Tax. It should be noted here that this exemption is limited only to the public agency when performing its role as a public authority, and according to its statutory powers, provided that such transaction is not according to economic or commercial criteria, or both, in addition to the absence of competition with the private sector, which is what must be verified by the Authority to ensure the correct application of the exemption. Example (23) A ministry granted a residential apartment without a consideration (within the context of implementing its statutory competencies in housing citizens). The seller (the ministry) is exempt from paying the Real Estate Transaction Tax prior to the property transfer process because the (ministry) has granted the residential apartment in the context of its role as a public authority responsible for supporting citizens in purchasing suitable housing at a low price supported by the state. Example (24) One of the public agencies sold a villa in one of the products to an individual for a value of (3,000,000) SAR, according to one of the investment programs it manages and implements. This transaction is subject by the public agency to the Real Estate Transaction Tax at a rate of 5%; as the agency sold the villa within the framework of its economic or commercial activities that compete with the private sector, and not within the framework of its role as a public authority.