Tax Alert - October 2020

Tax Alert - October 2020

Real Estate Transaction Tax


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On 1 October 2020,  Royal Decree A84 was issued announcing the creation of a new Real Estate Transaction Tax with a rate of 5% of the real estate supply. The Royal Decree exempts all real estate transactions that take place after the issue of this new decree from Value Added Tax (VAT) including:

  • transfer of ownership;
  • the sale of commercial, residential, or agricultural real estate; and
  • the sale of  developed and undeveloped land.

Licensed real estate developers will be entitled to recover VAT incurred on purchases of goods and services.

The General Authority for Zakat and Tax will be responsible for managing and collecting the new tax and the Minister of Finance will decide which VAT regulations will apply to the new tax until specific policies and regulations are drafted.

This decision marks an effort to boost the real estate sector, which forms an integral part of the Kingdom’s Vision 2030. It also aims to support the Kingdom’s citizens and includes a commitment that the government will bear up to SAR1 million in tax for the purchase of the first home by Saudi Nationals.

Get in touch

Riyadh Office


Wadih Abu Nasr

Head of Tax, KSA and Levant


Nick Soverall

Senior Director, Head of Indirect Tax, KSA


Peter Bourke

Senior Director, M&A/ Int’l Tax


Mohamed Araji

Senior Director, FS/ Tax Reimagined


Ali Sainudheen

Director, Tax & Zakat Compliance


Stefan El Khouri

Director, Transfer Pricing


Pascal Cange

Senior Tax Advisor, Customs and International Trade


Youssef Aoun

Director, Tax technology Lead


Jeddah Office

Mohamed ElSwefy

Senior Director, Family Office & Private Clients


Faisal Tanvir

Director, Tax & Zakat Compliance


Salam Eido

Director, Indirect Tax



Khobar Office

Tareq Al Sunaid

Partner, Head of Domestic Tax


Mohammad Kamran Sial

Senior Director, Tax & Zakat Compliance


Anil Bahl

Director, Khobar



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