Breaking Ground: Saudi Arabia Introduces Landmark Real Estate Transaction Tax System
Saudi Arabia Approves Real Estate Transaction Tax System
The Council of Ministers in Saudi Arabia has approved the real estate transaction tax system, marking a significant development in the country’s real estate sector.
The real estate transaction tax is levied at a rate of 5% of the gross value of the real estate transaction, applicable to the transfer of ownership of properties through sales, exchanges, or other similar transactions. According to the Executive Regulations for Excluded Real Estate Transaction Tax, all real estate transactions must be registered on the real estate transaction portal of the Zakat, Tax and Customs authorities.
Key Provisions of the Real Estate Transaction Tax System
- The tax rate is 5% of the gross value of the real estate transaction.
- The tax applies to the transfer of ownership of properties through sales, exchanges, or other similar transactions.
- All real estate transactions must be registered on the real estate transaction portal of the Zakat, Tax and Customs authorities.
Other Key Decisions by the Cabinet
In addition to approving the real estate transaction tax system, the Cabinet also approved the Commercial Registry and Trade Name System.
Furthermore, the Cabinet designated the year 2025 as the “Year of Handicrafts”, highlighting the country’s commitment to promoting its rich cultural heritage.
The Minister of Investment was authorized to negotiate and sign a draft revised annex to the Agreement on the Promotion and Mutual Protection of Investments between Saudi Arabia and the Hashemite Kingdom of Jordan.
The guiding model for a memorandum of understanding between the General Authority of Food and Drugs of the Kingdom of Saudi Arabia and counterpart agencies of other countries was also approved, paving the way for cooperation in the food and drug sector.