Real Estate Transaction Tax (RETT) in Saudi Arabia
Real Estate Transaction Tax is charged at 5% of the value of a disposal of real estate in Saudi Arabia, whether the property is land, a building or a share in one. It replaced VAT on real estate from October 2020 and now rests on its own RETT Law, in force since April 2025. The seller is liable and the tax is paid before the transfer is notarised.
Key facts
| Rate | 5% of the disposal value |
|---|---|
| Introduced | 4 October 2020 (RETT Law, Royal Decree M/84, in force from 10 April 2025) |
| Who pays | The disposer, before the transfer is registered |
| Common exemptions | Inheritance, notarised gifts to a spouse or relatives up to the third degree, qualifying in-kind capital contributions, group restructurings |
| Authority | Zakat, Tax and Customs Authority (ZATCA) |
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What triggers RETT
Any transfer of ownership or possession of real estate for consideration, including sales, exchanges, long leases treated as disposals and contributions of property to a company. A disposal of shares in a company whose assets consist mainly of real estate can be treated as a disposal of the underlying property, so share deals are not automatically outside the tax.
Exemptions and their conditions
Exempt disposals include inheritance, gifts to a spouse or relatives up to the third degree, contributions of property as capital into a company where the shares are held for the period the law requires, transfers within a qualifying group or reorganisation, transfers to real estate funds meeting the conditions, and disposals by or to government bodies. Each exemption has documentation requirements, and breaching the holding condition claws the tax back.
Frequently asked questions
- What is the RETT rate in Saudi Arabia?
- 5% of the value of the real estate disposed of.
- Does selling shares in a real estate company trigger RETT?
- It can. Where a company's assets consist mainly of real estate, a disposal of its shares may be treated as a disposal of the property.
- Is contributing land to a company as capital exempt?
- It can be exempt, provided the shares received are held for the period the law requires and the other conditions are met.
Primary sources
Related guides
Disclaimer: This page provides general tax information based on publicly available primary sources, reviewed on the date shown. Rules are conditional and change; the page may not reflect a change made after that date, and it is not a substitute for advice from a qualified tax professional on your specific situation.