The Real Estate Transaction Tax (RETT) is a mandatory levy in Saudi Arabia applied to the transfer of real estate ownership. Whether you are a seller or a buyer, understanding RETT obligations and filing requirements is crucial for compliance with Zakat, Tax and Customs Authority (ZATCA) regulations. This guide provides a detailed overview of RETT filing requirements, applicable rates, exemptions, and compliance tips for corporate taxpayers.
🏠 What is RETT?
RETT is a 5% tax levied on the value of real estate transactions, replacing VAT on property sales in most cases. It applies to the sale, gift, or exchange of property and is calculated on the higher of the property’s declared value or market value. Corporate taxpayers involved in real estate transactions must ensure accurate declaration and timely filing of RETT returns.
📅 Filing Deadlines for RETT Returns
RETT returns must be filed within 30 days from the date of the transaction. Failure to file within this timeframe may lead to penalties and interest charges imposed by ZATCA. Both the seller and buyer have roles in ensuring compliance.
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🛠 Filing Process for RETT Returns
- Access ZATCA’s RETT Portal through the e-Services platform using your corporate account.
- Select Real Estate Transaction Tax and click on New Return.
- Enter property details, including:
- Location and title deed number.
- Property type and size.
- Declared value or sale price.
- Identify the parties to the transaction:
- Seller: Typically responsible for paying RETT unless agreed otherwise.
- Buyer: May be responsible in certain transactions or under contractual arrangements.
- System automatically calculates the RETT due (5% of property value).
- Submit the return and pay the tax via SADAD or other approved channels.
⚖️ RETT Liability: Seller vs. Buyer
| Transaction Scenario | Responsible Party |
|---|---|
| Standard property sale | Seller (default) |
| Contract specifies buyer responsibility | Buyer |
| Property gifted or transferred | Donor / Transferor |
| Corporate restructuring | Determined by ZATCA guidelines |
📌 Exemptions from RETT
- Transfers to first-degree relatives (specific conditions apply).
- Transfers to government entities.
- Corporate restructurings that meet ZATCA’s exemption criteria.
- Endowment property transactions for charitable purposes.
📂 Documentation Required
- Property title deed.
- Sale agreement or transfer deed.
- Proof of payment of RETT.
- Supporting documents for exemptions (if applicable).
📊 Penalties for Non-Compliance
Late filing or underreporting RETT may result in penalties of 5% of the tax due for each month of delay, capped at 25% of the total liability. False declarations can lead to more severe fines and potential legal action.
🏁 Conclusion
RETT compliance in Saudi Arabia requires careful attention to transaction details, proper documentation, and timely filing. Corporate taxpayers must ensure they understand their obligations as sellers or buyers, leverage applicable exemptions, and avoid penalties by meeting ZATCA’s requirements. Accurate and timely RETT filing protects your business from unnecessary tax burdens and fosters smooth property transactions.
