Saudi Arabia scraps VAT on property deals introduces lower tax to boost the market 

RIYADH: Saudi Arabia’s king on Friday issued an order exempting real estate deals from a 15% value-added tax (VAT) and imposed a new 5% tax on transactions as the Gulf state moves to revitalize an economy hit by low oil prices and the COVID-19 pandemic.

The finance minister said on Twitter that the order, carried on state media, also aimed to support Saudi citizens who want to buy homes.

The government had in July tripled VAT to 15% to boost non-oil revenues, but the move has limited domestic demand.

“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 government has said it is committed to the plan but that programs would undergo “structural improvements” and be reprioritized to spur growth.

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 by Saudis to 70% by 2030 in a country with an overwhelmingly young population.

Saudi Arabia plans to cut spending by 7.5% in next year’s budget, according to a preliminary budget statement that forecasts a 12% budget deficit for 2020 and a 5.1% deficit next year.

Related Posts

Arabnews / Balkantimes.press

Napomena o autorskim pravima: Dozvoljeno preuzimanje sadržaja isključivo uz navođenje linka prema stranici našeg portala sa koje je sadržaj preuzet. Stavovi izraženi u ovom tekstu autorovi su i ne odražavaju nužno uredničku politiku The Balkantimes Press.

Copyright Notice: It is allowed to download the content only by providing a link to the page of our portal from which the content was downloaded. The views expressed in this text are those of the authors and do not necessarily reflect the editorial policies of The Balkantimes Press.

Contact Us