Real Estate Transaction Tax (RETT): Exemptions, Payment & Refunds

5% of the value of the real estate disposal, whatever the property’s condition, form or use — completed, under construction or off-plan — and whether or not the deal is notarised.

Any act that transfers ownership of real estate, or transfers its usufruct permanently or for more than 50 years, directly or indirectly.

The disposer (seller or transferor) is liable and must pay. Even if the parties agree that the buyer pays, the transferor remains liable to ZATCA. The buyer is jointly liable only if ZATCA proves it caused the non-payment.

On the disposal date, which is deemed to be the date of notarisation. Notaries must not notarise a disposal until the tax has been paid.

The total value agreed between the parties at the disposal date, within the limits of fair market value. Financing cost from licensed financiers is excluded.

Yes. Every disposal, taxable or exempt, is registered by the disposer on ZATCA’s portal on or before the disposal date, with the parties, deed number, property details, the exemption claimed and the value.

The RETT Law lists 21 exemptions, including inheritance, free transfers to a waqf or licensed charity, transfers to public bodies, gifts to a spouse or relatives up to the third degree, notarised wills, listed securities, in-kind contributions to company capital, mergers and acquisitions, intra-group transfers and court-ordered forced sales. Most carry conditions.

Only a notarised free gift to a spouse or a relative up to the third degree. Cousins are not included, and a sale to a parent is taxable. If the recipient passes the property within 3 years to someone who would not have qualified, the original gift loses its exemption.

An individual’s transfer to a Saudi company or fund he owns 100% is exempt if his full ownership does not change for 5 years. An in-kind contribution to a company’s capital is exempt if the shares are kept for 5 years and the company keeps audited financial statements.

Transfers between Saudi companies where one owns 100% of the other, or between sister companies or funds 100% owned by the same person, are exempt if the transferee stays 100% owned by that person for 5 years.

Only where the consideration is interests in the surviving or new entity with no cash or other extra, the interests are proportional to prior ownership, and the same owners keep them for 5 years. Any cash element makes it taxable.

No. The off-plan exemption covers transfers by any person to a licensed off-plan developer for a licensed project. Buyers purchasing units from developers are not exempt; tax is due at notarisation.

The transferor pays the tax or gives a cash or bank guarantee equal to it, and has 90 days to present the licence. If it is presented in time, the guarantee is returned or the tax refunded; if not, ZATCA cashes the guarantee and no later refund is allowed.

Returning the property is exempt only if the cancellation is recorded within 90 days of the original notarisation, the property is unchanged and the seller refunds the full price. Tax on the rescinded disposal is refundable.

Yes, if the company is a real estate company (Saudi property at least 50% of its total assets at fair value, on the transfer date or in the previous 365 days) and a person or group transfers 30% or more of its shares within any 3 years. Tax is on the fair value of all its property times the share transferred.

Only the first transfer to the licensed financier is taxed. The later transfer back to the customer is not taxed if both transfers are in the financing contracts and the property description and value do not change.

Overpaid or mistaken tax, tax on a disposal that was not completed, and tax on a rescinded disposal are refunded. Claims are due within 12 months of payment (or 60 days from a final court or settlement decision); ZATCA decides within 30 days and pays within 30 days of approval.

Evasion: up to 3 times the tax evaded. Late payment: 2% of the unpaid tax per month or part, capped at 50%. Other breaches: up to the tax due or SAR 50,000, whichever is higher.

ZATCA may review declared values within 3 years of the disposal date and re-assess where the value is below fair market value. Breaching an exemption condition later lets ZATCA claim the tax regardless of that limit.

A grievance can be filed with ZATCA within 60 days of notification, and ZATCA decides within 90 days. If it is rejected or there is no decision, the person may object to the competent judicial body within 30 days; otherwise the decision becomes final.