Real estate transaction tax (RETT) is a 5% tax charged in Saudi Arabia on every transfer of property ownership, whether by sale, swap, assignment or a similar disposal, calculated on the agreed price as long as it is within market value. Enter the deal value in the real estate transaction tax calculator and choose who bears the tax, and it shows both outcomes side by side: what the seller receives and what the buyer pays. If the buyer is a citizen buying a first home, tick that box to see the effect of the certificate. Below the tool is the list of exempt transactions as the law sets them out.
How to calculate real estate transaction tax
Multiply the transaction value by 5%. The value is the price agreed between seller and buyer, and it excludes the profit charged on financing when the buyer borrows from a licensed lender. If the stated price is below fair market value, ZATCA may recalculate the tax on market value within three years of the transaction.
RETT = Transaction value × 5%
Who pays real estate transaction tax: seller or buyer?
Article 7 of the law makes the seller (the disposer) liable for the tax and for paying it to ZATCA, and makes the buyer jointly liable if it is shown to have caused the non-payment. In practice the parties often agree that the buyer pays, and ZATCA's guide has allowed such an agreement, but it remains a private arrangement: if the tax goes unpaid, ZATCA pursues the seller. Write into the sale contract who bears the tax and whether the price is before or after it, so there is no dispute at the transfer of title.
The comparison in the calculator shows that the gap between the two outcomes is the tax itself, moving from the seller's net to the buyer's cost. Negotiating the price is, in effect, negotiating who carries the 5%.
RETT for individuals, and when the tax is due
The tax does not distinguish between an individual and a company, land and buildings, or residential and commercial property. An individual selling an apartment registers the transaction on ZATCA's real estate transactions platform, receives a payment number, and pays before or at notarization; the notary will not record a transfer whose tax is unpaid or whose exemption is not established. Under the new law, paying late costs 2% of the unpaid tax for each month or part of a month, capped at 50%; the previous regulations charged 5%.
First-home relief and the exemption certificate
ZATCA has announced that the state bears the tax on a citizen's first home up to a value of SAR 1,000,000, with 5% charged on anything above that. The buyer obtains a first-home certificate from the Sakani housing platform and gives it to the seller, who enters it when registering the transaction. This relief is not written into the text of the new law itself, so confirm that it still applies, and on what terms, with Sakani and ZATCA before pricing a deal on it; the calculator lets you change the cap if it moves.
For other exemptions (gifts to relatives, division of an estate, transfer to a wholly owned company) there is no certificate to obtain before the deal: the seller selects the exemption reason when registering the transaction on the platform and uploads the supporting documents, and ZATCA accepts or rejects it.
Transactions exempt from real estate transaction tax
Article 3 of the law lists twenty-one cases, all of them in the "Is the transaction exempt?" list under the calculator. The ones individuals meet most often are division of an estate, a notarized gift to a spouse or relatives up to the third degree, carrying out a notarized will, and returning a property when a sale is cancelled by mutual consent within 90 days. For businesses, the common ones are contributing property as an in-kind share in a company, transfers between companies wholly owned by one party, and mergers and acquisitions. Many of these exemptions require the asset or shares to be held for a set period, and a breach makes the tax payable within 30 days.
Real estate transaction tax and VAT
Since October 2020, property sales in the Kingdom have been exempt from VAT and subject to the 5% real estate transaction tax instead, so the two do not apply to the same sale. Leases stay within VAT: commercial rent is taxable at 15% and residential rent is exempt. A developer or contractor registered for VAT still charges it on construction work and services, because those are supplies of services, not transfers of ownership. To work out VAT on commercial rent or contracting work, use the VAT calculator.
What changed under the new law and regulations
- The Real Estate Transaction Tax Law was issued by Royal Decree M/84 and took effect in April 2025, and its new Implementing Regulations replaced the 2020 regulations.
- The late-payment penalty fell to 2% a month, capped at 50%, plus 1% more if ZATCA amends the tax and it is not paid within 30 days of the notice.
- New exemptions cover mergers and acquisitions, trading in securities and fund units, and forced sales.
- Selling 30% or more of the shares in a real estate company within three years may be treated as a real estate transaction.
- The regulations were amended in 2025 to widen the exemption for in-kind contributions to real estate funds, and to make tax on project contracts (build-operate-transfer) due when ownership or possession passes, payable within 30 days, according to ZATCA's announcement.
Common mistakes
- Stating a price below market value to cut the tax. ZATCA can reassess for three years, and a reassessment brings a penalty.
- Agreeing verbally that the buyer pays the tax, then disputing it at the transfer of title. Put it in the contract.
- Assuming a gift to any relative is exempt. The exemption covers a spouse and relatives up to the third degree, by notarized gift.
- Adding 15% VAT to a property sale, which is exempt from it.
- Disposing of shares or fund units that benefited from an exemption before the required holding period ends, which makes the tax payable.
What to do with the result
Write the tax amount and who bears it into the sale contract as the calculator shows, then the seller registers the transaction on ZATCA's real estate transactions platform to get the payment number. Use the "Download PDF" button and attach the calculation to the draft contract for both parties and the broker to review. If your case is one of the exemptions, prepare its document (the heirs' deed, proof of kinship, or the company's articles) before registering.
When property deals pile up in the books
A real estate business that sells units or moves property between group companies needs to know the tax on each transaction, what has been paid, what was exempted and when each holding condition ends, alongside VAT on its commercial leases and contracting work. At Microtec we offer accounting software (ERP) where sales, purchasing and finance for every project and deal are recorded in the same books, and our solutions are approved by the Zakat, Tax and Customs Authority. Test it on the deals of a single project.