Off-plan properties subject to Saudi VAT

Sales of off-plan properties in Saudi Arabia will be subject to the value-added tax (VAT), except for the units offered by the housing ministry, Hamoud Al-Harbi, head of VAT operations at the General Authority for Zakat and Taxes (GAZT), told Al-Eqtisadiah newspaper on Wednesday.

The related government service contracts concluded before January 2018 will be also VAT-exempt.

Meanwhile, the contracts concluded ahead of May 30, 2017 are subject to zero VAT, on condition that the beneficiary is entitled to discount the full input tax and submit the required certificate to the supplier, Harbi said.

For mortgage loans, only financing obtained for buying new homes is exempt from the new tax, with VAT being imposed on installments of loans for unit ownership. 

Harbi added that all government authorities are subject to VAT.

The Kingdom will start applying a 5 percent value added tax starting on Jan. 1, 2018, Argaam earlier reported.