Saudi Arabia Implements 5% Tax on All Real Estate Transactions

Saudi Arabia has officially implemented a 5% Real Estate Transaction Tax (RETT) across all types of property transactions, a move designed to strengthen the Kingdom’s economic diversification efforts under Vision 2030. The tax, which took effect on April 10, 2025, will apply to residential, commercial, industrial, and agricultural properties nationwide.

The Zakat, Tax and Customs Authority (ZATCA) confirmed that the new RETT framework is broad in scope, covering transactions regardless of a property's development status, usage, or whether full or partial ownership is being transferred. In addition, undocumented property deals and non-traditional transactions are also subject to the tax.

To ensure compliance, all real estate transfers must be registered through the dedicated RETT platform available on ZATCA’s official website. Sellers and buyers are required to submit detailed property information and declare any eligibility for exemptions before completing the transaction at a recognized notary or legal authority.

The RETT introduces a more structured and transparent approach to property dealings in Saudi Arabia, aiming to standardize processes, limit disputes, and create a more investor-friendly environment. According to ZATCA, this new measure will support the Kingdom’s goals of fostering a dynamic, sustainable real estate sector and generating additional non-oil revenue streams.

The introduction of the RETT also reflects Saudi Arabia’s commitment to enhancing its regulatory framework in line with international best practices. Analysts expect that the new tax will bring greater stability to the market, encourage long-term investments, and strengthen investor confidence, particularly among foreign buyers who are showing increasing interest in the Kingdom’s rapidly growing real estate landscape.

As Saudi Arabia continues to position itself as a global investment hub, measures like the RETT are seen as critical steps towards achieving a more diversified, resilient economy.