Exceptions and exemptions on Real Estate Transactions VAT. The General Authority for Zakat and Income said that the real estate tax, which was issued by royal order on 2nd October 2020 at 5% of the value of the real estate supply, will include a number of exceptions.
Exceptions and exemptions on Real Estate Transactions VAT
The authority clarified that among the exceptions that will be included in the tax are the distribution and transfer of real estate ownership among the heirs as part of the distribution of the estate, and the gift of real estate free of charge to the husband or wife or to one fo the relative up to the second degree (father, mother and children).
GAZT added that the exceptions also included transferring ownership of the property free of charge to a charitable organization or to a licenced charitable association. And other exceptions that will be detailed in the legislation related to the real estate tax.
The residential real estates’ rents will be exempted from Value added tax and commercial rents will be subject to a 15% tax.
The Authority menitioned that guides on exclusion and other updates will be issued later.
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