Real Estate Transaction Tax (RETT): A Quick Guide

## What is RETT?

The Real Estate Transaction Tax (RETT) applies to the transfer of real-estate ownership in Saudi Arabia, whether the property is land or a building, and regardless of the form of transfer (sale, gift, or other ways of moving ownership). It replaced value-added tax on real-estate transactions.

## The rate and who bears it

- The standard rate is **5%** of the value of the real-estate transaction. - It is calculated on the total value of the property being transferred. - The payment obligation typically falls on the **seller (the transferor)**, unless otherwise agreed within the limits allowed by the regulations.

## Exemptions

The tax framework includes specific exemption cases, such as certain transfers between close relatives, transfers linked to endowments (waqf) or wills, and other situations set out in the regulations. Exemptions are not always automatic; they usually require documenting and proving the case when the transaction is registered. To confirm whether an exemption applies to you, check the current conditions with the Authority.

## How it is documented and paid

- The transaction is documented electronically before the title transfer (ifragh) is completed. - The process is handled through ZATCA's dedicated real-estate transactions platform. - Documentation and payment (or confirming the exemption) must be completed as a step before ownership is transferred.

## Practical tips

- Factor the tax into the deal cost from the outset so it does not surprise you. - Agree in writing with the other party on who bears the tax. - Keep the documentation and payment notice with your transaction records.

Official sources: Zakat, Tax and Customs Authority (ZATCA).