A Royal Decree was issued on October 2 2020 to exempt the supplies (title transfer) of Real Estate from the levy of VAT at 15%. Furthermore, the related input cost shall be repaid to the licensed real estate developers. ( A list of such developers to be updated regularly). The provisions shall be effective once the Royal decree comes into effect and this would be subject to further rules and procedures to be approved by the MOF/ GAZT.
As a consequence, a new levy ie Real Estate Transaction Tax at the rate of 5% would be applied on the supplies of Real Estate, which will be collected by the GAZT at the time of registration of the property. Additionally, the transaction value for the first home purchase for Saudi Nationals has been increased from SAR 850,000 to SAR 1 million.
The details on the overall procedure and mechanism for the above would be published by the GAZT in due course.
Source: argaam.com
Contribution by Satish Sarda
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