Zakat authority clarifies real estate exempt from transaction tax
Saudi Zakat, Tax and Customs Authority outlines which properties are exempt from real estate transaction tax, including value thresholds and refund procedures.
The Saudi Zakat, Tax and Customs Authority has clarified which properties are exempt from the real estate transaction tax. A concerned individual inquired about properties valued at 375,000 riyals or less. The authority explained that, per Board of Directors Resolution No. (26-04-10) issued on August 16, 2020, value-added tax (VAT) is not required on real estate sold by an individual between January 1, 2018, and the implementation date of the transaction tax on October 4, 2020, as long as the individual is not engaged in regular real estate sales for income.
An individual is deemed to be in real estate sales if they conduct more than one real estate transaction within a 12-month span. VAT becomes due if the total value of these transactions surpasses the registration threshold. In 2018, this threshold was 1 million riyals, but since 2019, it has been set at 375,000 riyals. If an individual has paid unnecessary VAT on such a transaction and has not previously claimed input tax related to the property, they can apply for a refund through the Zakat, Tax and Customs Violations and Disputes Committees.
Contact information for submitting a claim can be found through the General Secretariat of the Zakat, Tax and Customs Committees via @CareGstc or by dialing 8001220000.
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