The Zakat, Tax and Customs Authority (ZATCA) has amended Real Estate Transaction Tax Implementing Regulations. The amendments included the degrees of relatives contained in the exclusion from real estate transaction tax (RETT), tax payment dates regarding the transactions carried out based on off-plan sales, as well as other amendments.
ZATCA declared that such amendments should enter into force on Friday 17 Rajab 1443 H (18th of February 2022 G). The key amendment made concerned the relatives' degrees is expanding the scope of who is exempt from paying the tax in cases of documented gift to include relatives of the third degree rather than the second, provided that the donee does not transfer ownership of the property for three years to anyone else, who does not have the right to be excluded from paying taxes if the property is given to him directly from the first donor.
In addition, ZATCA introduced a new article on the exemption from tax payment on any real estate transferred its ownership pursuant to a legal will documented by the Ministry of Justice, without the requirement that the will be within the limit of one-fourth of the deceased's estate, as was previously specified, and the exception of the gift of real estate free of charge for any offspring "family" or charitable endowment was expanded without the requirement that the gift be made only when the endowment is established in the beginning.
Moreover, ZATCA made an amendment in which the tax paid on off-plan sales shall be on or before the date of certification at notary public or legally accredited certification body. These sales shall be under Council of Ministers decision No. (536) dated the 4th of Dhul Hijja 1437 H, which means, that taxes may not be paid before or during signing of the contract of sale between the buyer and the proprietor.
ZATCA urges taxpayers who have any inquiries to reach out via its 24/7 call center hotline (19993), the Customer Care Twitter account (@Zatca_Care), via e-mail (info@zatca.gov.sa), or by instant messages on (www.zatca.gov.sa).
RETT shall be imposed at a rate of 5% on real estate whose ownership has been transferred from a person or enterprise to another by sale, trade-off, assignment, donation or similar manners, with some exceptions based on the provisions of the Real Estate Transaction Tax Implementing Regulations. Any real estate ownership transfer process must be documented on the ZATCA's website first by showing the property's data, determining the exclusion on transaction in case of tax non-payment. Then, the due tax shall be paid before the real estate conveyance at the notary public or a legally accredited certification body.
