Saudi Arabia Notes New Real Estate Transaction Tax Rate
Saudi Arabia has lowered the transaction costs of buying property as it tries to revitalise its economy which has been battered by a plunge in oil prices due to the coronavirus pandemic.
Its ruler issued an order on Friday exempting real estate deals from a 15 percent value added tax (VAT) and instead imposed a new 5 percent tax on transactions. “The royal order aims to support citizens and ease their burden and enable them to own homes, and helps develop the kingdom’s economy by spurring the residential and commercial property sector,” Finance Minister Mohammed al-Jadaan tweeted.
The royal order said the government would bear the cost of the new Real Estate Transaction Tax “for up to 1 million riyals ($266,616)” for Saudi citizens purchasing their first home.
The housing minister said the move would help achieve a target of boosting housing ownership among Saudis to 70 percent by 2030 in a country with an overwhelmingly young population.