Real Estate Transaction Tax Exemptions Saudi Arabia: 21 Cases

The real estate transaction tax exemptions Saudi Arabia grants are 21 categories, set out in Article 3(a) of the RETT Law and in force since 10 April 2025 (Umm Al-Qura). ZATCA's Detailed Guideline Version 6 (May 2026) prints 24 numbered exemption sections, 5.1.1 to 5.1.24: three carry reliefs granted by Royal Decree M/84 rather than by the Law, and a separate chapter 3 holds four cases that are out of scope rather than exempt (ZATCA). Exemption removes the tax, not the filing: no notary completes a transfer without ZATCA's registration notice. Most of the 21 are conditional, several of them on a five-year holding period, and the Law switches off its limitation period for a breach.

Key figures at a glance

How many real estate transaction tax exemptions Saudi Arabia grants

Twenty-one in law, counted item by item in the gazetted Arabic of Article 3(a) and in force since 10 April 2025. ZATCA's May 2026 guideline numbers twenty-four, and its chapter 3 holds four further cases that are not exemptions but transactions outside the charge. Each count is right about something different, which is why competing pages contradict each other.

Sections 5.1.10, 5.1.14 and 5.1.15 carry reliefs from Royal Decree M/84 itself, items Fifth(1), Fifth(2) and Fourth(2): lease-to-own and finance-lease contracts predating RETT, deals already subject to VAT before notarisation but notarised after the Law took effect, and a partner's unnotarised transfer into his company's name (Umm Al-Qura). Twenty-one plus three is the 24. A list stopping at 5.1.23 has dropped item 13 of the Law, in-kind subscription to a real estate fund. Rate and due dates sit on the RETT hub page.

Chapter 3 is the third list, and out of scope means no charge arises at all: interests in a real estate company are taxable only where a person, or persons acting in concert, move 30% or more of them within any three-year period (Regulation, Art. 2).

The 21 statutory exemptions, item by item

The Law's order is not the guideline's: item 9 is section 5.1.23, item 13 is 5.1.24, item 14 is 5.1.9. The conditions are the Implementing Regulation's, several of them nowhere in the Law.

One warning before reading an older memo against that table. A citation to "Article 3(a)(16)" written before April 2025 does not mean what it means after: under the superseded regulation, 16 was the natural person transferring to his wholly owned company and 17 the intra-group case (Umm Al-Qura). Those are now 17 and 18, and 16 is mergers and acquisitions. Item 6, meanwhile, belongs with the expropriation regime rather than with tax planning.

The gift exemption changed shape on 10 April 2025

Item 7 exempts a notarised gift to a spouse or a relative to the third degree. That phrase was redefined when the Law and its Regulation replaced the old regime, and the boundary moved in both directions. The change sits in Article One, the definitions article, not in the exemption itself, so reading the exemption alone will never show it.

The superseded regulation, as amended on 18 February 2022, ran: first, fathers, mothers, grandparents and above; second, children and their descendants; third, brothers and sisters, their children and their children's children (Umm Al-Qura). Article One of the current Regulation reads: first, father, mother, son, daughter; second, brother, sister, grandparents, grandchildren; third, paternal and maternal uncles and aunts, nephews and nieces (ZATCA).

So a gift to an uncle or an aunt was taxable before 10 April 2025 and exempt after it. A great-grandparent and a great-great-grandchild sat inside the old first and second degrees through the phrases "and above" and "and their descendants", and are not enumerated in the new list at all. Advising off the pre-2025 taxonomy puts the boundary in the wrong place at both ends, and the withdrawn Version 5 guideline is no help: it applied the definition then in force. The definition changed; nobody misread it.

An exempt transaction is still a registered one

Article 3(b) of the Regulation, in force since 10 April 2025, requires every transaction exempt under Article Three to be registered, and Article 11 makes the assignor file on ZATCA's portal, taxable or exempt, on or before the transaction date (Regulation, Arts. 3(b) and 11). Field (d) of the six-field form identifies the exemption claimed, and filing counts as a declaration that the data is true.

The notice ZATCA sends back is what the notary asks for: no competent authority completes a transfer until it has verified registration and either payment or the exemption (Guideline V6, 10.4). The one carve-out covers publicly offered and listed securities. Whether the parties may own the asset at all is a separate test, in the foreign ownership rules.

When an exemption breaks, the bill dates back to the original deal

Where a conditional exemption stops applying, the tax falls due from the date of the original transaction rather than the date of the breach (Regulation, Art. 4(f)), and the taxpayer reports the breach himself within 30 days and pays within 30 days of it. Then the sentence that should govern how a Saudi restructuring is papered: ZATCA's three-year windows to verify, recalculate and claim do not limit its right to claim where an exemption's time-bound conditions are breached (Law, Art. 8(6)). An exempt transfer is a contingent liability with no expiry date.

The guideline works it to the month. A SAR 5,000,000 building contributed for shares on 15 October 2020: sell the shares on 15 November 2024 and the exemption is revoked retroactively, taxing the 2020 transaction; sell on 15 November 2025 and it holds. An IPO of the assignee's shares, a court-ordered forced sale and an exempt merger are not breaches at all (Regulation, Art. 3(c)).

How to claim a RETT refund, and the deadline the English text gets wrong

Three grounds open a refund, and the first is retrospective exemption: tax paid in excess or by mistake, expressly including tax paid on a transaction later proven exempt. File within twelve months of the date the tax fell due, or sixty days of a final judicial or settlement decision. ZATCA decides within 30 days, extendable once, silence counting as a rejection in law, and nothing is refunded while an objection is live (Regulation, Art. 9).

The tie-break is where this costs money. The Regulation sets none between its twelve months and its sixty days; the guideline supplies one twice, in opposite directions, "whichever is earlier" in section 11 and "whichever is later" in section 7.2 for old-regime refunds. The Arabic edition of that same section 7.2 says أيهما أسبق, whichever is earlier, and the cover makes the Arabic prevail (Arabic Guideline V6). Neither phrase appears in Article 9(b) or 14(c) of the Regulation. Work from the English translation and you compute the wrong deadline.

What ZATCA registers and never publishes

Every exempt transaction is registered and each generates a confirmation notice, so ZATCA knows exactly how many of its registrations paid nothing. That split has never been published, and neither has RETT collected, revenue forgone, refunds rejected by silence, or exemptions clawed back. The denominator is missing too: the only registry totals released are more than 543,000 transactions in the tax's first ten months, published 3 August 2021, and 568,671 real estate sales, published 16 January 2022 on a page whose body states no period (ZATCA, ZATCA). Nothing later exists, so the size of the transaction registry is not a public number.

The populations can be sized where their use cannot. Private funds classified as real estate numbered 965 at Q1 2026 against 309 at Q1 2023, holding SAR 380,674.64 million (CMA, 47th Statistical Bulletin), beside 36 Saudi IPO offerings in 2025 on the offering side of that bulletin's table 2, a side that must not be added to its listing side. Both count vehicles and offerings, not exemptions claimed, and ZATCA publishes no breakdown across the 21 categories, so how often any single exemption fires is not a number anyone can quote, ours included. Advisers write mostly about the securities case. Item 14, the financing guarantee, is on our reading the one carrying the most transactions, because every Ijara mortgage moves title to the financier and back and both legs are exempt, and a refinancing portfolio moves it again. No count of those transfers is published either.

Omran estimate: no restructuring exemption from the 2022 round has cleared its clock. Arithmetic, not a sourced figure. Five exemptions took effect together on 19 August 2022, and three carry a five-year holding condition, each a restructuring into a wholly owned or endowment-owned Saudi vehicle (ZATCA). Five years from that date falls in August 2027, so on any reading dated in 2026 the earliest transaction relying on them is still inside its holding period, still revocable, and under Article 8(6) the exposure does not time out.

That gap is the work: reading the gazette against the guideline, the Arabic against the English, until every condition traces to the instrument imposing it. Ask for the exemption table with its source lines, mapped to the deals you are papering.

FAQ

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

Is a sale to my father or my son exempt from RETT? No. Only a gift without consideration qualifies under item 7, and ZATCA's 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 and from when? The tax falls due from the date of the original transaction, not the sale, and Article 8(6) removes the limitation period for that claim. Report the breach within 30 days and pay within 30 days of it; a 2% monthly fine then runs 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 judicial or settlement decision, with ZATCA deciding in 30 days and silence counting as rejection. On an old-regime claim, read the Arabic guideline: it says the earlier of the two where the English says "later".

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