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Saudi Arabia's King Salman issued, on Oct. 2, a royal decree, exempting real estate supplies from the value-added tax (VAT), once the provisions of this decree come into effect, the Saudi Press Agency reported.
When the provisions of the decree come into effect, the input costs will be repaid to the licensed real estate developers. A new list of those developers will be regularly updated.
The exemption is subject to the rules, approved by the Minister of Finance and chairman of the General Authority of Zakat and Tax (GAZT), in coordination with the Minister of Housing.
The Saudi King imposed a 5% real estate transaction tax on property supplies, which are collected upon the registration of the real estate transaction.
Moreover, the finance minister will define the real estate supplies, which are subject to the new tax, after being exempted from VAT.
The Kingdom will cover a real estate transaction tax of SAR 1 million maximum from the first-home purchase price. The related procedures will be set by the finance minister.
GAZT will manage and collect the real estate transaction tax. Disputes that might arise under these provisions will be settled by the Committee for Resolution of Tax Violations and Disputes and the emergency committee for tax disputes.
The abovementioned decrees will be published in the Official Gazette, and will come into effect within a maximum of 15 days from the date of issuance.
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