Which Saudi property deals are exempt from transaction tax

Saudi Arabia's real estate transaction tax has 21 exemptions. They are listed in Article 3(a) of the RETT Law, in force since 10 April 2025 (Umm Al-Qura). ZATCA's Version 6 guideline, published in May 2026, lists 24 (ZATCA).

Exempt deals still have to be filed, and no notary will complete a transfer without ZATCA's registration notice. Most exemptions are also conditional, several on holding the asset for five years, and a breach has no limitation period.

Key figures at a glance

How many exemptions are there?

Twenty-one in the Law. We counted them item by item in the gazetted Arabic text. ZATCA's guideline numbers twenty-four. Its chapter 3 adds four more cases, which fall outside the tax altogether. The Law counts only the exemptions it grants itself, while the guideline also counts reliefs granted by Royal Decree, so pages online give different totals.

The extra three sit in sections 5.1.10, 5.1.14 and 5.1.15. They come from Royal Decree M/84, items Fifth(1), Fifth(2) and Fourth(2) (Umm Al-Qura). They cover lease-to-own and finance-lease contracts signed before RETT, deals already under VAT but notarised after the Law took effect, and a partner's unnotarised transfer into his company's name.

A list that stops at 5.1.23 has dropped item 13 of the Law, in-kind subscription to a real estate fund. The rate and due dates are on our RETT hub page.

The four cases in chapter 3 are out of scope, so no tax arises at all. Shares in a real estate company, for example, are taxed only when a person, or people acting together, move 30% or more of them within any three-year period (Regulation, Art. 2).

The 21 exemptions and their conditions

The guideline does not follow the Law's order. Item 9 is section 5.1.23, item 13 is 5.1.24 and item 14 is 5.1.9. Many of the conditions below come from the Implementing Regulation.

Be careful with older memos. Before April 2025, "Article 3(a)(16)" meant a natural person transferring to his wholly owned company, and 17 meant the intra-group case (Umm Al-Qura). Those are now 17 and 18. Number 16 is now mergers and acquisitions. Item 6 is best read alongside the expropriation regime.

The family gift exemption changed in April 2025

Item 7 exempts a notarised gift to a spouse or to a relative "to the third degree". The meaning of that phrase changed on 10 April 2025. The change sits in the definitions article, so reading the exemption on its own won't show it.

The old regulation, as amended on 18 February 2022, put parents and grandparents "and above" in the first degree, children "and their descendants" in the second, and siblings and their children and grandchildren in the third (Umm Al-Qura). The current Regulation puts parents and children first, then siblings, grandparents and grandchildren, then uncles, aunts, nephews and nieces (ZATCA).

So a gift to an uncle or aunt was taxed before 10 April 2025 and is exempt now. Great-grandparents and great-great-grandchildren were covered before and are no longer listed. The withdrawn Version 5 guideline won't help here, as it used the old definition.

Exempt deals still have to be registered

Article 3(b) of the Regulation says every exempt transaction must be registered. Under Article 11 the seller files on ZATCA's portal on or before the transaction date, taxable or not (Regulation, Arts. 3(b) and 11). Field (d) of the six-field form names the exemption claimed. Filing counts as a declaration that the data is true.

The notary then asks for ZATCA's notice. No transfer completes until registration and either payment or the exemption have been checked (Guideline V6, 10.4). Listed and publicly offered securities are the only carve-out. Whether the buyer may own the property at all is a separate question, covered in the foreign ownership rules.

A broken condition revives the tax from day one

If a conditional exemption stops applying, tax is due from the date of the original deal, even if the breach comes years later (Regulation, Art. 4(f)). The taxpayer must report the breach within 30 days and pay within 30 days of it.

ZATCA's usual three-year window does not apply here. Under Article 8(6) of the Law, it can claim at any time when a time-bound exemption condition is broken, so an exempt transfer stays open to a claim indefinitely (Law, Art. 8(6)).

The guideline gives a worked example. A SAR 5,000,000 building is contributed for shares on 15 October 2020. If the shares are sold on 15 November 2024, the exemption is revoked and the 2020 deal is taxed. Sold on 15 November 2025, it holds. An IPO of the receiving company, a court-ordered forced sale and an exempt merger do not count as breaches (Regulation, Art. 3(c)).

Refunds, and a deadline the English text gets wrong

A refund is possible for tax paid in excess or by mistake, including tax paid on a deal later shown to be exempt. The claim must be filed within twelve months of the due date, or sixty days from a final court or settlement decision. ZATCA has 30 days to decide, extendable once, and silence counts as a rejection. Nothing is refunded while an objection is open (Regulation, Art. 9).

The Regulation doesn't say which of the two deadlines wins. The English guideline says "whichever is earlier" in section 11 but "whichever is later" in section 7.2, for old-regime refunds. The Arabic version of section 7.2 says أيهما أسبق, whichever is earlier, and the Arabic text prevails (Arabic Guideline V6). Neither phrase appears in Article 9(b) or 14(c) of the Regulation. Working from the English, you would get the wrong date.

What ZATCA doesn't publish

ZATCA registers every exempt deal, so it knows how many registrations paid no tax. It has never published that figure. Nor does it publish RETT collected, revenue forgone, refunds rejected by silence or exemptions clawed back.

ZATCA has released only two registry counts, and both are old. On 3 August 2021 ZATCA reported more than 543,000 transactions in the tax's first ten months. On 16 January 2022 it reported 568,671 real estate sales, with no period stated (ZATCA, ZATCA). The size of the transaction registry is therefore not public.

Some of the vehicles involved can be counted. The CMA reports 965 private real estate funds at Q1 2026, against 309 at Q1 2023. Together they held SAR 380,674.64 million (CMA, 47th Statistical Bulletin). The same bulletin's table 2 shows 36 Saudi IPO offerings in 2025, a count of offerings that should not be added to listings. No public data shows how often each exemption is used.

Most advisers write about the securities case. Our reading is that item 14, the financing guarantee, covers the most deals. Every Ijara mortgage moves title to the bank and back, both legs exempt, and a refinancing moves it again. No count of those transfers is published either.

Omran estimate: no restructuring exemption from the 2022 round has cleared its five-year clock yet. This is our own arithmetic. Five exemptions took effect on 19 August 2022, and three of them require a five-year holding period (ZATCA). Five years runs to August 2027, so throughout 2026 every deal relying on them can still be revoked, with no time limit under Article 8(6).

We have mapped each condition back to the text that imposes it, Arabic and English side by side. Ask for the exemption table with its source lines, matched to the deals you are working on.

FAQ

Do I still have to register an exempt transaction with ZATCA? Yes, on or before the transaction date. The form asks which exemption you are claiming, and the notary will not complete the transfer without ZATCA's notice.

Is a sale to my father or my son exempt from RETT? No. Only a gift qualifies under item 7. ZATCA's own example taxes land sold to a father for SAR 1,000,000 at 5%. Gifts are exempt to a spouse and to relatives to the third degree, which since 10 April 2025 includes uncles, aunts, nephews and nieces.

If I sell the shares before five years are up, what do I owe? Tax from the date of the original deal, and Article 8(6) removes the time limit on that claim. Report the breach within 30 days and pay within 30 days of it. After that, a fine of 2% a month runs up to a 50% cap.

How long do I have to claim a RETT refund? Twelve months from the date the tax fell due, or sixty days from a final court or settlement decision. ZATCA decides within 30 days, and silence means rejection. For old-regime claims, follow the Arabic guideline, which says the earlier of the two.

Sources

• Umm Al-Qura, RETT Law (the 21 exemptions in Art. 3(a), the Council of Ministers power in Art. 3(b), Art. 8(6), penalties in Art. 15): link
• Umm Al-Qura, Royal Decree M/84 (the three decree-based reliefs): link
• Umm Al-Qura, 2022 amendments (superseded definition of relatives): link
• Umm Al-Qura, 2023 amendments (old sub-paragraphs 16 and 17): link
• ZATCA, Implementing Regulation, Arabic (Articles 1 to 11 and 14): link
• ZATCA, Detailed Guideline for RETT, Version 6, English: link
• ZATCA, Detailed Guideline Version 6, Arabic (section 7.2, the prevailing text): link
• ZATCA news, amendments effective 19 August 2022: link
• ZATCA news, registry count published 3 August 2021: link
• ZATCA news, registry count published 16 January 2022: link
• CMA, Quarterly Statistical Bulletin, 47th issue, Q1 2026 (private real estate funds, IPO offerings): link