Zakat, Tax and Customs Authority clarifies who pays real estate transaction tax

Saudi Arabia’s Zakat, Tax and Customs Authority has clarified who is responsible for paying the real estate transaction tax at the time of property transfer.

The authority stated via its “Ask Zakat, Tax and Customs” account on X that the seller and buyer can agree on how to share the tax burden.

It added that anyone can pay the tax bill calculated at the time of transfer, but the seller remains legally responsible for settling the tax and any related obligations to the authority.

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The authority noted that, since October 4, 2020, a real estate transaction tax of 5% has been imposed on the total value of a property sale or transfer of ownership, regardless of its condition, type, or use at the time of sale, unless exempted.

It added that details of exemptions can be found in Article 3, available at zat.ca/8fqt08.

The clarification came in response to a follower’s question: “Who pays the real estate transaction tax, the seller or the buyer?”