Tax Alert - October 2020
Tax Alert - October 2020
Real Estate Transaction Tax
On 1 October 2020, Royal Decree A84 was issued announcing the creation of a new Real Estate Transaction Tax with a rate of 5% of the real estate supply. The Royal Decree exempts all real estate transactions that take place after the issue of this new decree from Value Added Tax (VAT) including:
- transfer of ownership;
- the sale of commercial, residential, or agricultural real estate; and
- the sale of developed and undeveloped land.
Licensed real estate developers will be entitled to recover VAT incurred on purchases of goods and services.
The General Authority for Zakat and Tax will be responsible for managing and collecting the new tax and the Minister of Finance will decide which VAT regulations will apply to the new tax until specific policies and regulations are drafted.
This decision marks an effort to boost the real estate sector, which forms an integral part of the Kingdom’s Vision 2030. It also aims to support the Kingdom’s citizens and includes a commitment that the government will bear up to SAR1 million in tax for the purchase of the first home by Saudi Nationals.
Get in touch
Riyadh Office
Wadih Abu Nasr Head of Tax, KSA and Levant |
Nick Soverall Senior Director, Head of Indirect Tax, KSA |
Peter Bourke Senior Director, M&A/ Int’l Tax |
Mohamed Araji Senior Director, FS/ Tax Reimagined |
Ali Sainudheen Director, Tax & Zakat Compliance |
Stefan El Khouri Director, Transfer Pricing |
Pascal Cange Senior Tax Advisor, Customs and International Trade |
Youssef Aoun Director, Tax technology Lead |
Jeddah Office
Mohamed ElSwefy Senior Director, Family Office & Private Clients |
Faisal Tanvir Director, Tax & Zakat Compliance |
Salam Eido Director, Indirect Tax |
Khobar Office
Tareq Al Sunaid Partner, Head of Domestic Tax |
Mohammad Kamran Sial Senior Director, Tax & Zakat Compliance |
Anil Bahl Director, Khobar |
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