Saudi Arabia: Expanded exemptions from real estate transaction tax

Saudi Arabia: Real estate transaction tax

Amendments to the regulations implementing the real estate transaction tax have been approved by the General Authority of Zakat and Tax (GAZT).

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Ministerial Resolution No. 2229 (effective 22 January 2021) provides for additional exemptions (partial or full exemptions) from the real estate transaction tax for certain transactions.

Expanded exemptions

Amendments concern an exemption or exclusion from the real estate transaction tax for property disposed of as an in-kind contribution to the capital of a company by any person, provided that corresponding shares are not disposed of for five years. The amended section expands the provision to apply to in-kind contributions to the capital of:

  • Joint stock companies
  • Limited liability companies
  • Partnerships or limited partnership companies

These companies must maintain financial statements audited by a certified external auditor throughout the five years, measured from the date of receipt of these shares.

Other amendments address new transactions that would be exempt from the real estate transaction tax under certain conditions.

  • An exemption from the real estate transaction tax regarding the disposal of real estate by a shareholder in a company on transferring and registering the property in the name of the company provided that:
    • The property has been booked as part of the company's assets before the effective date of the implementing regulations.
    • The seller submits audited financial statements, or a certificate from a licensed legal accountant, showing that the property was recorded as part of the company's assets before the effective date of the implementing regulations and remains an asset until the date of disposal.
  • An exemption on the transfer of real estate as an in-kind participation to the capital of a real estate investment fund:
    • If it is disposed of upon establishing the fund and in accordance with the rules and regulations of the Capital Market Authority.
    • The exception does not include the funds that are established for the purpose of leasing real estate.

Read background about the real estate transaction tax: TaxNewsFlash (October 2020)


For more information, contact the head of KPMG’s Global Indirect Tax Services:

Lachlan Wolfers | +852 2685 7791| lachlan.wolfers@kpmg.com

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