• The following words and phrases, wherever they appear in this Regulation, shall have the meanings specified next to each of them, unless the context requires otherwise:

  • Regulation: The Implementing Regulation for Real Estate Transactions Tax.

  • Ministry: Ministry of Finance.

  • Minister: Minister of Finance.

  • Authority: Zakat, Tax, and Customs Authority.

  • Governor: Governor of the Authority.

  • Tax: The financial amount imposed on the real estate transaction.

  • Real Estate Transaction: Any legal action that transfers ownership of real estate or possession for the purpose of owning it or benefiting from it, including but not limited to contracts that involve the transfer of the right to benefit or long-term lease rights, such as; sale, compensation, gift, will, barter, lease, financial lease, transfer of shares in real estate companies, or establishing a right to benefit for a period exceeding (50) years.

  • Notarization: A set of procedures that ensure the proof of the right in a manner that can be relied upon, in accordance with the provisions of the Notarization Law and its Regulation, and is considered as notarization for tax purposes any contract, agreement, or waiver under which the transaction is concluded, in the absence of applying the official notarization procedure for the action.

  • Informal Documents: These are documents through which transactions are proven outside the scope of official statutory notarization.

  • Relatives up to the third degree: Refers to:

    • First degree: Parents, mothers, grandfathers, and grandmothers, regardless of their lineage.

    • Second degree: Children, and their children, regardless of their descent.

    • Third degree: Brothers and sisters, full siblings, or half-siblings, and their children.

A tax at a rate of 5% (five percent) of the total value of real estate transaction value shall be imposed, regardless its condition, appearance or use at the time of transaction. It shall include the land and establishments, constructions or building thereon, whether the transaction was conducted in the same condition, or after establishing facilities thereon, whether this transaction includes the whole or part of the real estate, or is partitioned, common, residential units, or other kinds of real estates and whether this transaction was authenticated or not.

• RETT shall be collected as follows:

  • 1. The RETT shall be collected from the owner who shall pay the RETT and any other potential obligations arising therefrom.

  • 2. The parties may agree upon otherwise provisions contrary to those set forth in Paragraph (1) of this Article; nevertheless, the owner shall remain responsible for payment before the Authority.

  • 3. Without prejudice to the provisions set forth in Paragraphs (2 and 1) of this Article, the owner and the party disposed to shall be jointly liable for any tax obligations due in accordance herewith, and the Authority shall be entitled to recourse against them jointly or severally, as the case may be.

• For the purposes of verifying that the due tax is calculated correctly, the Authority shall be entitled to:

  • 1. Verify the value of the real estate property or the real estate transactions; and

  • 2. Estimate values of the real estate and transactions of indeterminate value, for those the value thereof stated in the contract is found to be below the market value, or for those incorrect information or data is provided.

• The tax shall be refunded in any of the following cases: 

  • 1- The tax paid in excess or by mistake, or the tax paid for a real estate transaction that was not completed.

  • 2- The tax paid for a real estate transaction that has been canceled, provided that all conditions stated in paragraph (20) of item (A) of Article (3) of this regulation are met. 

The guardian, custodian, trustee, agent, caretaker, liquidator, receiver, bankruptcy trustee, the General Commission for the Guardianship of Trust Funds for Minors and their Counterparts, and the General Authority for Awqaf shall comply with the provisions hereof when acting on behalf of a third party.

• Without prejudice to any more severe penalty provided for in any other law, the following penalties shall be applied to the violators of the provisions hereof:

  • A. A person commits violations that are deemed RETT evasion, which are described in Article (9) hereof, shall liable to a fine not less than the value of RETT due and not more than threefold.

  • B. A person who violates any of the provisions hereof shall be liable to a fine not less than ten thousand Saudi riyals (SAR 10,000) and not more than the value of the RETT due.

  • C. A person who does not pay the RETT due within the period specified by law shall be liable to a fine of (5%) of the value of the unpaid RETT for each month or a part thereof. The Minister of Finance shall be entitled to exempt from or reduce such penalties pursuant to rules determined thereby.

• Any of the following shall be deemed tax evasion, unless the violator proves otherwise:

  • 1. Providing incorrect data on the value of the real estate transaction that results in non-payment of the full or part of the due tax;

  • 2. Using deception, arrangement or any other means that results in non-payment of the full or part of the due tax;

  • 3. Any other procedure or action that results in non-payment of the full or part of the due tax;

  • 4. A person who assists or engages with the violator in evading payment of the tax shall be subject to the same penalties set out in this Article.

• The employees determined by a decision of the Governor shall oversee, inspect and detect violations of the provisions hereof. The same shall have all the powers necessary to perform their functions in order to detect the acts violating the provisions hereof. The penalty shall be executed by a decision of the Governor or his authorized representative