RETT on the Sale of Real Estate in Saudi Arabia: The Standard Case | Dariba.co<\/title>\n<meta name=\"description\" content=\"How RETT applies to a standard real estate sale in Saudi Arabia \u2014 payment mechanics, fair market value rules, installment sales, the Notary Public link, and what happens when the transaction falls through.\">\n<link rel=\"preconnect\" href=\"https:\/\/fonts.googleapis.com\">\n<link href=\"https:\/\/fonts.googleapis.com\/css2?family=DM+Sans:wght@400;500;600;700;800&display=swap\" rel=\"stylesheet\">\n<style>\n:root{--green:#059669;--green-light:#d1fae5;--green-dim:#ecfdf5;--green-border:#6ee7b7;--amber:#d97706;--amber-light:#fffbeb;--amber-border:#fcd34d;--blue:#2563eb;--blue-light:#eff6ff;--blue-border:#93c5fd;--red:#dc2626;--text-primary:#111827;--text-muted:#6b7280;--text-light:#9ca3af;--border:#e5e7eb;--surface:#f9fafb;--surface-2:#f3f4f6;--radius:8px;--radius-lg:12px}\n.dariba-article{font-family:'DM Sans',-apple-system,BlinkMacSystemFont,'Segoe 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.also-title{font-size:0.875rem;font-weight:600;color:var(--text-primary);line-height:1.4}\n.dariba-article .disclaimer{font-size:0.78rem;color:var(--text-muted);border-top:1px solid var(--border);padding-top:1rem;margin-top:2.5rem;font-style:italic;line-height:1.6}\n<\/style>\n<\/head>\n<body>\n<div class=\"dariba-article\">\n\n<div class=\"article-meta\">\n <span>Taxable Events<\/span>\n<\/div>\n\n\n<div class=\"series-banner\">\n Part of <a href=\"https:\/\/www.dariba.co\/rett-saudi-arabia\/\">RETT in Saudi Arabia: The Complete Guide<\/a> \u2014 Cluster 2: Taxable Events \u00b7 Article 2.2\n<\/div>\n\n\n<div class=\"section-block\" id=\"mechanics\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">01<\/span>\n <h2>The Standard Sale: How RETT Works in Practice<\/h2>\n <\/div>\n <p>A standard real estate sale \u2014 one party transfers ownership of Saudi property to another in exchange for a cash price \u2014 is the paradigm RETT transaction. The tax is 5% of the total value of the transaction, assessed on the agreed price provided it reflects fair market value.<\/p>\n <p>The mechanics are deliberately simple: the assignor (seller) accesses ZATCA’s electronic portal at zatca.gov.sa, enters the transaction details, and the system generates a payment invoice for 5% of the declared value. That invoice must be paid before the Notary Public or Accredited Notary will complete the ownership transfer \u2014 the Ministry of Justice systems are electronically linked to ZATCA’s RETT portal, making payment a hard prerequisite to notarization.<\/p>\n <p>The seller bears the RETT liability. The buyer may agree contractually to pay RETT on the seller’s behalf \u2014 and in practice this is negotiated \u2014 but the legal obligation sits with the assignor (seller) under Article 7 of the Implementing Regulations. If ZATCA later reassesses the transaction and finds additional tax is due, it is the seller who is primarily pursued, not the buyer (unless the buyer was party to a value-understatement arrangement).<\/p>\n<\/div>\n\n\n<div class=\"section-block\" id=\"fair-market-value\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">02<\/span>\n <h2>When the Agreed Price Is Below Fair Market Value<\/h2>\n <\/div>\n <p>RETT is assessed on the agreed price, <em>provided that price is within the limits of the fair market value.<\/em> This qualifier matters. If ZATCA determines that the agreed price understates the fair market value of the property, it may assess RETT on the fair market value instead.<\/p>\n <p>Article 8 of the Implementing Regulations identifies specific scenarios where ZATCA may verify the declared value. These include: transactions between related persons (as defined by Article 64 of the Income Tax Law and the Transfer Pricing Bylaws), transactions where the consideration is split between the real estate and other assets, non-cash consideration structures, and cases involving an unknown or unspecified value. ZATCA also has the right to challenge where it “suspects manipulation of the value of a real estate transaction deliberately for any purpose.”<\/p>\n <p>In cases where ZATCA challenges the value, the assignor or assignee may submit an assessment from an accredited valuator. If ZATCA still finds the value below fair market value, it will assess using approved real estate market indices or its own accredited valuator. A reassessment demand can be issued within three years from the date of disclosure of the transaction.<\/p>\n\n <div class=\"callout\">\n <div class=\"callout-label\">Worked Example \u2014 Below-FMV Sale<\/div>\n <h4>Scenario<\/h4>\n <p>Tarek Al-Malki sells a commercial plot in the Al-Murjan district of Jeddah to his business associate for SAR 4,000,000. The agreed price is documented in the sale contract and declared to ZATCA. ZATCA’s review of market comparables indicates the fair market value on the transaction date was SAR 4,600,000. The parties are not formally related under the Transfer Pricing Bylaws definition, but ZATCA flags the transaction as potentially undervalued.<\/p>\n <h4>RETT Position<\/h4>\n <p>ZATCA notifies Tarek of a potential reassessment. Tarek commissions an accredited valuator, whose report confirms a value of SAR 4,200,000. ZATCA accepts this figure as a reasonable market value. Revised RETT: SAR 4,200,000 \u00d7 5% = <strong>SAR 210,000<\/strong> (versus the originally paid SAR 200,000). The additional SAR 10,000 plus any late-payment fines on the difference become payable.<\/p>\n <p><strong>Note:<\/strong> If the transaction had been between related persons (family members, commonly controlled entities), ZATCA would apply the fair market value rule automatically, without requiring a separate suspicion trigger.<\/p>\n <\/div>\n\n <div class=\"callout callout-warning\">\n <div class=\"callout-label\">Related-Party Sales \u2014 Heightened Scrutiny<\/div>\n <p>Sales between relatives, between entities under common control, or between persons who qualify as “related persons” under Article 64 of the Income Tax Law are automatically subject to fair market value assessment. Declaring a below-market agreed price in a related-party transaction is not simply a risk \u2014 it is a near-certain trigger for a ZATCA challenge. The 3-year reassessment window applies from the date of disclosure.<\/p>\n <\/div>\n<\/div>\n\n\n<div class=\"section-block\" id=\"installment-sales\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">03<\/span>\n <h2>Installment Sales: When Is RETT Due?<\/h2>\n <\/div>\n <p>A common question in practice: if a seller agrees to receive the purchase price in installments over several years, does RETT arise on each installment, or all at once?<\/p>\n <p>The answer is clear under the RETT framework: <strong>RETT arises on the date of the taxable event \u2014 the transfer of the right \u2014 not on the date of each payment.<\/strong> The fact that the consideration is paid in installments does not defer or fragment the tax obligation. If ownership (or possession for the purpose of ownership) transfers on a specific date, RETT is due on that date, on the full value of the transaction.<\/p>\n <p>For notarized sales, the tax must be paid before or on the date of notarization. The seller cannot pay RETT on a “received so far” basis. The full 5% is assessed on the total agreed consideration at the point of the transaction, and the entire RETT amount is due upfront.<\/p>\n <p>This has a practical cash flow implication for sellers receiving consideration over time: the RETT liability arises and must be paid at the point of transfer, even if the full price has not yet been received. Sellers structuring deferred-payment sales need to factor this into their liquidity planning.<\/p>\n<\/div>\n\n\n<div class=\"section-block\" id=\"portal-process\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">04<\/span>\n <h2>The ZATCA Portal Process: Step by Step<\/h2>\n <\/div>\n <p>For a standard notarized sale, the process is as follows:<\/p>\n\n <ol class=\"article-list\">\n <li><strong>Seller logs into ZATCA’s portal<\/strong> (zatca.gov.sa) and selects the Real Estate Transaction Tax service.<\/li>\n <li><strong>Transaction details are entered:<\/strong> deed number, contract data, nature of the transfer, whether an exemption is claimed, and the declared transaction value.<\/li>\n <li><strong>ZATCA’s system calculates the RETT amount<\/strong> and issues a payment invoice at 5% of the declared value.<\/li>\n <li><strong>Payment is made<\/strong> to the bank account specified by ZATCA, referencing the transaction number. The buyer may make this payment on the seller’s behalf \u2014 but the legal liability remains with the seller.<\/li>\n <li><strong>Proof of payment is presented to the Notary Public<\/strong> or Accredited Notary. The notarization system is electronically linked to ZATCA \u2014 the notarization cannot proceed until ZATCA’s records confirm payment has been received.<\/li>\n <li><strong>The Notary completes the transfer<\/strong> and notifies the seller of completion.<\/li>\n <\/ol>\n\n <div class=\"callout callout-info\">\n <div class=\"callout-label\">First Home Mechanism<\/div>\n <p>Where the buyer qualifies for the First Home exemption (the state bearing RETT on first home purchases up to SAR 1,000,000), the buyer must first obtain a “First Home” certificate from the Ministry of Housing portal (www.housing.gov.sa) and provide it to the seller. The seller then logs into ZATCA’s portal, enters the buyer’s certificate details, and the system verifies eligibility. If eligible, ZATCA generates the invoice with the state-borne portion already credited. RETT remains payable at 5% on any amount exceeding SAR 1,000,000 in purchase price.<\/p>\n <\/div>\n<\/div>\n\n\n<div class=\"section-block\" id=\"non-notarized\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">05<\/span>\n <h2>Non-Notarized Sales and Unofficial Documents<\/h2>\n <\/div>\n <p>Not all real estate transfers in Saudi Arabia are notarized at the time of the underlying agreement. RETT applies to these transactions too. The Implementing Regulations address this specifically: where possession of the real estate transfers to the buyer for the purpose of ownership without formal notarization, the tax due date is the date on which the property is placed in the possession of the transferee.<\/p>\n <p>In these cases, payment must be made within 30 calendar days of the disposal date. The disposal date can be established by any evidence available to ZATCA \u2014 including unofficial documents, circumstantial evidence, and market information. Waiting for notarization before paying RETT on a non-notarized transfer is a non-compliance risk.<\/p>\n <p>ZATCA may accelerate the payment demand to 30 days from the date of disposal where it is proven that delayed payment was the main purpose of the delay (Article 5(D) of the Implementing Regulations). This anti-avoidance provision is intended to address deliberate deferral tactics.<\/p>\n<\/div>\n\n\n<div class=\"section-block\" id=\"cancelled-transactions\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">06<\/span>\n <h2>When the Transaction Falls Through: Refunds and Cancellations<\/h2>\n <\/div>\n <p>RETT already paid can be refunded in certain circumstances under Article 9 of the Implementing Regulations.<\/p>\n\n <ul class=\"article-list\">\n <li><strong>Tax paid in excess or by mistake:<\/strong> A refund application may be submitted, including where tax was paid but it subsequently emerged the transaction was exempt.<\/li>\n <li><strong>Incomplete transaction:<\/strong> If the real estate transaction does not complete after RETT has been paid, the seller can apply for a refund \u2014 but must first return any consideration already received from the buyer, and must notify ZATCA in accordance with the correction procedures.<\/li>\n <li><strong>Mutual consent cancellation within 90 days:<\/strong> Where both parties cancel a notarized real estate transaction by mutual consent, and the cancellation is notarized with the Notary Public within 90 days of the original notarization, with the full value returned to the buyer and the real estate description unchanged, RETT is refundable.<\/li>\n <\/ul>\n\n <p>Refund requests must be submitted within 12 months from the payment due date, or within 60 days from the date of a final court decision or ZATCA settlement decision relating to the transaction. ZATCA must issue its decision on a refund request within 30 days, and if approved, must process the refund within a further 30 days.<\/p>\n\n <div class=\"callout callout-warning\">\n <div class=\"callout-label\">90-Day Cancellation Window<\/div>\n <p>The mutual consent cancellation refund mechanism has a strict 90-day window from the original notarization date. A cancellation notarized on day 91 does not qualify. If you expect a transaction may be rescinded \u2014 for example, because the buyer’s financing has not been confirmed \u2014 build the 90-day window into your transaction timeline before paying RETT.<\/p>\n <\/div>\n<\/div>\n\n\n<div class=\"section-block\" id=\"faq\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">07<\/span>\n <h2>Frequently Asked Questions<\/h2>\n <\/div>\n <div class=\"faq-list\">\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">Can the buyer pay RETT instead of the seller?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">Yes \u2014 in practice, the parties often contractually agree that the buyer will bear the RETT cost. This is legally permissible and common in the Saudi market. However, the legal obligation to ZATCA remains with the assignor (seller). If the buyer pays on the seller’s behalf and the payment is insufficient, ZATCA will pursue the seller for the shortfall. The contractual agreement between buyer and seller does not bind ZATCA.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">Is the RETT based on the sale price or the property’s assessed value?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">RETT is based on the agreed sale price, provided that price reflects fair market value. If ZATCA determines the agreed price is below fair market value, it will reassess on FMV. For transactions between unrelated parties at arm’s length, the agreed price is generally accepted. For related-party sales, ZATCA applies FMV automatically. The parties may commission an accredited valuator to support their declared price if challenged.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">We agreed a price of SAR 3 million but the buyer will pay in three annual instalments. When and how much RETT is due?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">RETT of SAR 150,000 (5% \u00d7 SAR 3,000,000) is due before or on the date of notarization \u2014 not across three years. The installment structure of the payment does not affect the timing or quantum of RETT. The full RETT amount must be paid upfront at the time of the taxable event, regardless of when the seller actually receives the full purchase price.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">The sale completed but the buyer defaulted on the installments and we want to rescind. Can we recover the RETT paid?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">If the sale is cancelled by mutual consent and notarized within 90 days of the original notarization, RETT is refundable \u2014 provided the full consideration is returned to the buyer and the property description is unchanged. If more than 90 days have passed, the mutual consent cancellation exemption does not apply. You may have a civil claim against the buyer for the RETT amount as part of your broader damages, but ZATCA will not refund it. A court-ordered rescission may separately trigger its own refund analysis.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">Our company is selling a building to a third party. We received a total consideration of SAR 20 million, partly for the land, partly for moveable fit-out. How is RETT calculated?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">The full SAR 20 million is subject to RETT if the fit-out items are permanently installed and intended for the permanent service of the real estate \u2014 in which case they are deemed part of the real estate under Article 2 of the Implementing Regulations. If the moveable items are truly separate and not permanently installed (and can be removed without affecting the real estate), you may seek to apportion the value \u2014 but this is an area where ZATCA has the right to verify the split and challenge an unreasonable apportionment. Proper independent valuations for each component are advisable.<\/div>\n <\/div>\n\n <\/div>\n<\/div>\n\n\n<div class=\"takeaways\">\n <div class=\"takeaways-title\">◆ Key Takeaways<\/div>\n <ol>\n <li>RETT on a standard sale is 5% of the agreed price, provided it reflects fair market value. Where it does not, ZATCA assesses on FMV.<\/li>\n <li>The seller (assignor) is legally responsible for RETT. The buyer may pay as a commercial arrangement but ZATCA’s claim is against the seller.<\/li>\n <li>RETT is due at the point of the taxable event \u2014 not spread across instalment payments. The full 5% must be paid before notarization.<\/li>\n <li>The ZATCA portal generates the payment invoice. Payment must precede Notary Public notarization \u2014 no payment, no transfer.<\/li>\n <li>Related-party sales trigger automatic FMV scrutiny. Declare at real market value or engage an accredited valuator.<\/li>\n <li>A mutual consent cancellation notarized within 90 days of the original notarization qualifies for a RETT refund, subject to full consideration being returned.<\/li>\n <\/ol>\n<\/div>\n\n\n<div class=\"series-footer\">\n <p>RETT in Saudi Arabia \u2014 Cluster 2: Taxable Events<\/p>\n <h4>Continue with the full RETT knowledge library on dariba.co<\/h4>\n <a href=\"https:\/\/www.dariba.co\/rett-saudi-arabia\/\" class=\"btn-primary\">View all RETT articles \u2192<\/a>\n<\/div>\n\n\n<div class=\"also-reading\">\n <h4>Related Articles<\/h4>\n <div class=\"also-cards\">\n <a href=\"https:\/\/www.dariba.co\/what-triggers-rett\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">What Transactions Trigger RETT? The Complete Guide<\/div>\n <\/a>\n <a href=\"https:\/\/www.dariba.co\/rett-calculation-guide\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">RETT Calculation Guide: How the Tax Base Is Determined<\/div>\n <\/a>\n <a href=\"https:\/\/www.dariba.co\/how-to-pay-rett-zatca\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">How to File and Pay RETT: The ZATCA Portal Step by Step<\/div>\n <\/a>\n <a href=\"https:\/\/www.dariba.co\/rett-penalties\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">RETT Penalties: Late Payment, Underpayment and Enforcement<\/div>\n <\/a>\n <\/div>\n<\/div>\n\n<p class=\"disclaimer\">This article is grounded in the RETT Law (Royal Decree No. M\/84, effective 10 April 2025), the Implementing Regulations (ZATCA Board Resolution No. 01-03-25, dated 24 March 2025), and ZATCA’s Detailed Guideline for RETT (Version 6, May 2026). It is for informational purposes only and does not constitute legal or tax advice. dariba.co is an independent knowledge platform.<\/p>\n\n<\/div>\n<script>\ndocument.querySelectorAll('.dariba-article .faq-q').forEach(function(btn){btn.addEventListener('click',function(){btn.parentElement.classList.toggle('open');});});\n<\/script>\n<\/body>\n<\/html>\n\n","protected":false},"excerpt":{"rendered":"<p>RETT on the Sale of Real Estate in Saudi Arabia: The Standard Case | Dariba.co Taxable Events Part of RETT in Saudi Arabia: The Complete Guide \u2014 Cluster 2: Taxable Events \u00b7 Article 2.2 01 The Standard Sale: How RETT Works in Practice A standard real estate sale \u2014 one party transfers ownership of Saudi […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-502","post","type-post","status-publish","format-standard","hentry","category-rett"],"_links":{"self":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=502"}],"version-history":[{"count":0,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/502\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}

{"id":502,"date":"2026-06-06T10:07:53","date_gmt":"2026-06-06T10:07:53","guid":{"rendered":"https:\/\/www.dariba.co\/?p=502"},"modified":"2026-06-06T10:07:53","modified_gmt":"2026-06-06T10:07:53","slug":"rett-on-the-sale-of-real-estate","status":"publish","type":"post","link":"https:\/\/www.dariba.co\/?p=502","title":{"rendered":"RETT on the Sale of Real Estate in Saudi Arabia: The Standard Case"},"content":{"rendered":"\n\n\n\n\n\nRETT on the Sale of Real Estate in Saudi Arabia: The Standard Case | Dariba.co<\/title>\n<meta name=\"description\" content=\"How RETT applies to a standard real estate sale in Saudi Arabia \u2014 payment mechanics, fair market value rules, installment sales, the Notary Public link, and what happens when the transaction falls through.\">\n<link rel=\"preconnect\" href=\"https:\/\/fonts.googleapis.com\">\n<link href=\"https:\/\/fonts.googleapis.com\/css2?family=DM+Sans:wght@400;500;600;700;800&display=swap\" 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.also-card{background:var(--surface);border:1px solid var(--border);border-radius:var(--radius);padding:1rem;text-decoration:none;display:block;transition:border-color 0.2s,box-shadow 0.2s}\n.dariba-article .also-card:hover{border-color:var(--green);box-shadow:0 2px 8px rgba(5,150,105,0.08)}\n.dariba-article .also-card .also-label{font-size:0.68rem;font-weight:700;text-transform:uppercase;color:var(--green);letter-spacing:0.08em;margin-bottom:0.35rem}\n.dariba-article .also-card .also-title{font-size:0.875rem;font-weight:600;color:var(--text-primary);line-height:1.4}\n.dariba-article .disclaimer{font-size:0.78rem;color:var(--text-muted);border-top:1px solid var(--border);padding-top:1rem;margin-top:2.5rem;font-style:italic;line-height:1.6}\n<\/style>\n<\/head>\n<body>\n<div class=\"dariba-article\">\n\n<div class=\"article-meta\">\n <span>Taxable Events<\/span>\n<\/div>\n\n\n<div class=\"series-banner\">\n Part of <a href=\"https:\/\/www.dariba.co\/rett-saudi-arabia\/\">RETT in Saudi Arabia: The Complete Guide<\/a> \u2014 Cluster 2: Taxable Events \u00b7 Article 2.2\n<\/div>\n\n\n<div class=\"section-block\" id=\"mechanics\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">01<\/span>\n <h2>The Standard Sale: How RETT Works in Practice<\/h2>\n <\/div>\n <p>A standard real estate sale \u2014 one party transfers ownership of Saudi property to another in exchange for a cash price \u2014 is the paradigm RETT transaction. The tax is 5% of the total value of the transaction, assessed on the agreed price provided it reflects fair market value.<\/p>\n <p>The mechanics are deliberately simple: the assignor (seller) accesses ZATCA’s electronic portal at zatca.gov.sa, enters the transaction details, and the system generates a payment invoice for 5% of the declared value. That invoice must be paid before the Notary Public or Accredited Notary will complete the ownership transfer \u2014 the Ministry of Justice systems are electronically linked to ZATCA’s RETT portal, making payment a hard prerequisite to notarization.<\/p>\n <p>The seller bears the RETT liability. The buyer may agree contractually to pay RETT on the seller’s behalf \u2014 and in practice this is negotiated \u2014 but the legal obligation sits with the assignor (seller) under Article 7 of the Implementing Regulations. If ZATCA later reassesses the transaction and finds additional tax is due, it is the seller who is primarily pursued, not the buyer (unless the buyer was party to a value-understatement arrangement).<\/p>\n<\/div>\n\n\n<div class=\"section-block\" id=\"fair-market-value\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">02<\/span>\n <h2>When the Agreed Price Is Below Fair Market Value<\/h2>\n <\/div>\n <p>RETT is assessed on the agreed price, <em>provided that price is within the limits of the fair market value.<\/em> This qualifier matters. If ZATCA determines that the agreed price understates the fair market value of the property, it may assess RETT on the fair market value instead.<\/p>\n <p>Article 8 of the Implementing Regulations identifies specific scenarios where ZATCA may verify the declared value. These include: transactions between related persons (as defined by Article 64 of the Income Tax Law and the Transfer Pricing Bylaws), transactions where the consideration is split between the real estate and other assets, non-cash consideration structures, and cases involving an unknown or unspecified value. ZATCA also has the right to challenge where it “suspects manipulation of the value of a real estate transaction deliberately for any purpose.”<\/p>\n <p>In cases where ZATCA challenges the value, the assignor or assignee may submit an assessment from an accredited valuator. If ZATCA still finds the value below fair market value, it will assess using approved real estate market indices or its own accredited valuator. A reassessment demand can be issued within three years from the date of disclosure of the transaction.<\/p>\n\n <div class=\"callout\">\n <div class=\"callout-label\">Worked Example \u2014 Below-FMV Sale<\/div>\n <h4>Scenario<\/h4>\n <p>Tarek Al-Malki sells a commercial plot in the Al-Murjan district of Jeddah to his business associate for SAR 4,000,000. The agreed price is documented in the sale contract and declared to ZATCA. ZATCA’s review of market comparables indicates the fair market value on the transaction date was SAR 4,600,000. The parties are not formally related under the Transfer Pricing Bylaws definition, but ZATCA flags the transaction as potentially undervalued.<\/p>\n <h4>RETT Position<\/h4>\n <p>ZATCA notifies Tarek of a potential reassessment. Tarek commissions an accredited valuator, whose report confirms a value of SAR 4,200,000. ZATCA accepts this figure as a reasonable market value. Revised RETT: SAR 4,200,000 \u00d7 5% = <strong>SAR 210,000<\/strong> (versus the originally paid SAR 200,000). The additional SAR 10,000 plus any late-payment fines on the difference become payable.<\/p>\n <p><strong>Note:<\/strong> If the transaction had been between related persons (family members, commonly controlled entities), ZATCA would apply the fair market value rule automatically, without requiring a separate suspicion trigger.<\/p>\n <\/div>\n\n <div class=\"callout callout-warning\">\n <div class=\"callout-label\">Related-Party Sales \u2014 Heightened Scrutiny<\/div>\n <p>Sales between relatives, between entities under common control, or between persons who qualify as “related persons” under Article 64 of the Income Tax Law are automatically subject to fair market value assessment. Declaring a below-market agreed price in a related-party transaction is not simply a risk \u2014 it is a near-certain trigger for a ZATCA challenge. The 3-year reassessment window applies from the date of disclosure.<\/p>\n <\/div>\n<\/div>\n\n\n<div class=\"section-block\" id=\"installment-sales\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">03<\/span>\n <h2>Installment Sales: When Is RETT Due?<\/h2>\n <\/div>\n <p>A common question in practice: if a seller agrees to receive the purchase price in installments over several years, does RETT arise on each installment, or all at once?<\/p>\n <p>The answer is clear under the RETT framework: <strong>RETT arises on the date of the taxable event \u2014 the transfer of the right \u2014 not on the date of each payment.<\/strong> The fact that the consideration is paid in installments does not defer or fragment the tax obligation. If ownership (or possession for the purpose of ownership) transfers on a specific date, RETT is due on that date, on the full value of the transaction.<\/p>\n <p>For notarized sales, the tax must be paid before or on the date of notarization. The seller cannot pay RETT on a “received so far” basis. The full 5% is assessed on the total agreed consideration at the point of the transaction, and the entire RETT amount is due upfront.<\/p>\n <p>This has a practical cash flow implication for sellers receiving consideration over time: the RETT liability arises and must be paid at the point of transfer, even if the full price has not yet been received. Sellers structuring deferred-payment sales need to factor this into their liquidity planning.<\/p>\n<\/div>\n\n\n<div class=\"section-block\" id=\"portal-process\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">04<\/span>\n <h2>The ZATCA Portal Process: Step by Step<\/h2>\n <\/div>\n <p>For a standard notarized sale, the process is as follows:<\/p>\n\n <ol class=\"article-list\">\n <li><strong>Seller logs into ZATCA’s portal<\/strong> (zatca.gov.sa) and selects the Real Estate Transaction Tax service.<\/li>\n <li><strong>Transaction details are entered:<\/strong> deed number, contract data, nature of the transfer, whether an exemption is claimed, and the declared transaction value.<\/li>\n <li><strong>ZATCA’s system calculates the RETT amount<\/strong> and issues a payment invoice at 5% of the declared value.<\/li>\n <li><strong>Payment is made<\/strong> to the bank account specified by ZATCA, referencing the transaction number. The buyer may make this payment on the seller’s behalf \u2014 but the legal liability remains with the seller.<\/li>\n <li><strong>Proof of payment is presented to the Notary Public<\/strong> or Accredited Notary. The notarization system is electronically linked to ZATCA \u2014 the notarization cannot proceed until ZATCA’s records confirm payment has been received.<\/li>\n <li><strong>The Notary completes the transfer<\/strong> and notifies the seller of completion.<\/li>\n <\/ol>\n\n <div class=\"callout callout-info\">\n <div class=\"callout-label\">First Home Mechanism<\/div>\n <p>Where the buyer qualifies for the First Home exemption (the state bearing RETT on first home purchases up to SAR 1,000,000), the buyer must first obtain a “First Home” certificate from the Ministry of Housing portal (www.housing.gov.sa) and provide it to the seller. The seller then logs into ZATCA’s portal, enters the buyer’s certificate details, and the system verifies eligibility. If eligible, ZATCA generates the invoice with the state-borne portion already credited. RETT remains payable at 5% on any amount exceeding SAR 1,000,000 in purchase price.<\/p>\n <\/div>\n<\/div>\n\n\n<div class=\"section-block\" id=\"non-notarized\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">05<\/span>\n <h2>Non-Notarized Sales and Unofficial Documents<\/h2>\n <\/div>\n <p>Not all real estate transfers in Saudi Arabia are notarized at the time of the underlying agreement. RETT applies to these transactions too. The Implementing Regulations address this specifically: where possession of the real estate transfers to the buyer for the purpose of ownership without formal notarization, the tax due date is the date on which the property is placed in the possession of the transferee.<\/p>\n <p>In these cases, payment must be made within 30 calendar days of the disposal date. The disposal date can be established by any evidence available to ZATCA \u2014 including unofficial documents, circumstantial evidence, and market information. Waiting for notarization before paying RETT on a non-notarized transfer is a non-compliance risk.<\/p>\n <p>ZATCA may accelerate the payment demand to 30 days from the date of disposal where it is proven that delayed payment was the main purpose of the delay (Article 5(D) of the Implementing Regulations). This anti-avoidance provision is intended to address deliberate deferral tactics.<\/p>\n<\/div>\n\n\n<div class=\"section-block\" id=\"cancelled-transactions\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">06<\/span>\n <h2>When the Transaction Falls Through: Refunds and Cancellations<\/h2>\n <\/div>\n <p>RETT already paid can be refunded in certain circumstances under Article 9 of the Implementing Regulations.<\/p>\n\n <ul class=\"article-list\">\n <li><strong>Tax paid in excess or by mistake:<\/strong> A refund application may be submitted, including where tax was paid but it subsequently emerged the transaction was exempt.<\/li>\n <li><strong>Incomplete transaction:<\/strong> If the real estate transaction does not complete after RETT has been paid, the seller can apply for a refund \u2014 but must first return any consideration already received from the buyer, and must notify ZATCA in accordance with the correction procedures.<\/li>\n <li><strong>Mutual consent cancellation within 90 days:<\/strong> Where both parties cancel a notarized real estate transaction by mutual consent, and the cancellation is notarized with the Notary Public within 90 days of the original notarization, with the full value returned to the buyer and the real estate description unchanged, RETT is refundable.<\/li>\n <\/ul>\n\n <p>Refund requests must be submitted within 12 months from the payment due date, or within 60 days from the date of a final court decision or ZATCA settlement decision relating to the transaction. ZATCA must issue its decision on a refund request within 30 days, and if approved, must process the refund within a further 30 days.<\/p>\n\n <div class=\"callout callout-warning\">\n <div class=\"callout-label\">90-Day Cancellation Window<\/div>\n <p>The mutual consent cancellation refund mechanism has a strict 90-day window from the original notarization date. A cancellation notarized on day 91 does not qualify. If you expect a transaction may be rescinded \u2014 for example, because the buyer’s financing has not been confirmed \u2014 build the 90-day window into your transaction timeline before paying RETT.<\/p>\n <\/div>\n<\/div>\n\n\n<div class=\"section-block\" id=\"faq\">\n <div class=\"section-number\">\n <span class=\"section-num-badge\">07<\/span>\n <h2>Frequently Asked Questions<\/h2>\n <\/div>\n <div class=\"faq-list\">\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">Can the buyer pay RETT instead of the seller?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">Yes \u2014 in practice, the parties often contractually agree that the buyer will bear the RETT cost. This is legally permissible and common in the Saudi market. However, the legal obligation to ZATCA remains with the assignor (seller). If the buyer pays on the seller’s behalf and the payment is insufficient, ZATCA will pursue the seller for the shortfall. The contractual agreement between buyer and seller does not bind ZATCA.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">Is the RETT based on the sale price or the property’s assessed value?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">RETT is based on the agreed sale price, provided that price reflects fair market value. If ZATCA determines the agreed price is below fair market value, it will reassess on FMV. For transactions between unrelated parties at arm’s length, the agreed price is generally accepted. For related-party sales, ZATCA applies FMV automatically. The parties may commission an accredited valuator to support their declared price if challenged.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">We agreed a price of SAR 3 million but the buyer will pay in three annual instalments. When and how much RETT is due?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">RETT of SAR 150,000 (5% \u00d7 SAR 3,000,000) is due before or on the date of notarization \u2014 not across three years. The installment structure of the payment does not affect the timing or quantum of RETT. The full RETT amount must be paid upfront at the time of the taxable event, regardless of when the seller actually receives the full purchase price.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">The sale completed but the buyer defaulted on the installments and we want to rescind. Can we recover the RETT paid?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">If the sale is cancelled by mutual consent and notarized within 90 days of the original notarization, RETT is refundable \u2014 provided the full consideration is returned to the buyer and the property description is unchanged. If more than 90 days have passed, the mutual consent cancellation exemption does not apply. You may have a civil claim against the buyer for the RETT amount as part of your broader damages, but ZATCA will not refund it. A court-ordered rescission may separately trigger its own refund analysis.<\/div>\n <\/div>\n\n <div class=\"faq-item\">\n <button class=\"faq-q\">Our company is selling a building to a third party. We received a total consideration of SAR 20 million, partly for the land, partly for moveable fit-out. How is RETT calculated?<span class=\"faq-icon\">+<\/span><\/button>\n <div class=\"faq-a\">The full SAR 20 million is subject to RETT if the fit-out items are permanently installed and intended for the permanent service of the real estate \u2014 in which case they are deemed part of the real estate under Article 2 of the Implementing Regulations. If the moveable items are truly separate and not permanently installed (and can be removed without affecting the real estate), you may seek to apportion the value \u2014 but this is an area where ZATCA has the right to verify the split and challenge an unreasonable apportionment. Proper independent valuations for each component are advisable.<\/div>\n <\/div>\n\n <\/div>\n<\/div>\n\n\n<div class=\"takeaways\">\n <div class=\"takeaways-title\">◆ Key Takeaways<\/div>\n <ol>\n <li>RETT on a standard sale is 5% of the agreed price, provided it reflects fair market value. Where it does not, ZATCA assesses on FMV.<\/li>\n <li>The seller (assignor) is legally responsible for RETT. The buyer may pay as a commercial arrangement but ZATCA’s claim is against the seller.<\/li>\n <li>RETT is due at the point of the taxable event \u2014 not spread across instalment payments. The full 5% must be paid before notarization.<\/li>\n <li>The ZATCA portal generates the payment invoice. Payment must precede Notary Public notarization \u2014 no payment, no transfer.<\/li>\n <li>Related-party sales trigger automatic FMV scrutiny. Declare at real market value or engage an accredited valuator.<\/li>\n <li>A mutual consent cancellation notarized within 90 days of the original notarization qualifies for a RETT refund, subject to full consideration being returned.<\/li>\n <\/ol>\n<\/div>\n\n\n<div class=\"series-footer\">\n <p>RETT in Saudi Arabia \u2014 Cluster 2: Taxable Events<\/p>\n <h4>Continue with the full RETT knowledge library on dariba.co<\/h4>\n <a href=\"https:\/\/www.dariba.co\/rett-saudi-arabia\/\" class=\"btn-primary\">View all RETT articles \u2192<\/a>\n<\/div>\n\n\n<div class=\"also-reading\">\n <h4>Related Articles<\/h4>\n <div class=\"also-cards\">\n <a href=\"https:\/\/www.dariba.co\/what-triggers-rett\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">What Transactions Trigger RETT? The Complete Guide<\/div>\n <\/a>\n <a href=\"https:\/\/www.dariba.co\/rett-calculation-guide\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">RETT Calculation Guide: How the Tax Base Is Determined<\/div>\n <\/a>\n <a href=\"https:\/\/www.dariba.co\/how-to-pay-rett-zatca\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">How to File and Pay RETT: The ZATCA Portal Step by Step<\/div>\n <\/a>\n <a href=\"https:\/\/www.dariba.co\/rett-penalties\/\" class=\"also-card\">\n <div class=\"also-label\">RETT<\/div>\n <div class=\"also-title\">RETT Penalties: Late Payment, Underpayment and Enforcement<\/div>\n <\/a>\n <\/div>\n<\/div>\n\n<p class=\"disclaimer\">This article is grounded in the RETT Law (Royal Decree No. M\/84, effective 10 April 2025), the Implementing Regulations (ZATCA Board Resolution No. 01-03-25, dated 24 March 2025), and ZATCA’s Detailed Guideline for RETT (Version 6, May 2026). It is for informational purposes only and does not constitute legal or tax advice. dariba.co is an independent knowledge platform.<\/p>\n\n<\/div>\n<script>\ndocument.querySelectorAll('.dariba-article .faq-q').forEach(function(btn){btn.addEventListener('click',function(){btn.parentElement.classList.toggle('open');});});\n<\/script>\n<\/body>\n<\/html>\n\n","protected":false},"excerpt":{"rendered":"<p>RETT on the Sale of Real Estate in Saudi Arabia: The Standard Case | Dariba.co Taxable Events Part of RETT in Saudi Arabia: The Complete Guide \u2014 Cluster 2: Taxable Events \u00b7 Article 2.2 01 The Standard Sale: How RETT Works in Practice A standard real estate sale \u2014 one party transfers ownership of Saudi […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-502","post","type-post","status-publish","format-standard","hentry","category-rett"],"_links":{"self":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=502"}],"version-history":[{"count":0,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/502\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}