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العربية

Real estate transaction tax

Work out the 5% real estate transaction tax (RETT) on a property sale, and how much the state covers if it’s a Saudi citizen’s first home.

Tax to pay

40,000.00

Tax at 5%
90,000.00
Paid by the state
− 50,000.00

The tax applies to each sale or transfer of property, including land. Some transfers are exempt, such as dividing an inheritance. The buyer and seller agree who pays, and it’s settled through ZATCA before the transfer.

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How it’s calculated

  • Tax = property price × 5%
  • First home: the state bears the tax on the first SAR 1,000,000, so you pay 5% only on the amount above it

Examples

Price (SAR) First home? Tax to pay (SAR)
950,000 Yes 0
1,800,000 Yes 40,000
1,800,000 No 90,000

Good to know

  • The buyer gets a First Home certificate from the Ministry of Municipalities and Housing, and the support is applied through ZATCA.
  • Some transfers are exempt, such as dividing an inheritance among heirs.
  • The tax is settled before the transfer is completed at the notary.

Planning to finance the purchase? Try the mortgage calculator.

Real estate transaction tax: common questions

How much is the real estate tax in Saudi Arabia?

5% of the total value of the sale or transfer, for homes, land and commercial property alike, unless the transfer is exempt.

Is there an exemption for a first home?

For an eligible Saudi citizen’s first home, the state bears the tax on the first SAR 1,000,000 of the price. Tax is still due at 5% on anything above that.

Is VAT charged on property sales?

No. The real estate transaction tax replaced the 15% VAT on property sales in 2020.

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