In brief
Permits, primary and secondary rights in rem, and other similar rights closely linked to the real estate, so that they cannot be separated from it, form part of the total value of the real estate for RETT.
Development land is valued as much for its approvals as for the land itself. Zoning, permits and access rights can double what a plot is worth. Article 2(d) makes sure RETT is charged on that combined value, and that it cannot be reduced by pricing the approvals separately.
The Provision: Exact Text
What It Means in Plain English
For RETT, permits and rights in rem that come with a property, such as building approvals, easements and other real rights tied to the land, are part of its taxable value. If they cannot be separated from the property, they are taxed with it.
Breaking Down the Provision
“Permits”
Building permits, approved master plans, subdivision approvals and land-use permissions attached to the plot.
“Primary and secondary rights in rem”
- Primary rights in rem: ownership and its branches, such as usufruct and rights of use.
- Secondary (accessory) rights in rem: rights that secure an obligation over the property.
“Closely linked … inseparable”
This is the test. If a right cannot exist or be transferred apart from the property, it belongs in the base. Rights personal to a business, which could move with the operator, do not.
Inside and Outside the Base
| Right | Treatment |
|---|---|
| Building permit for the plot | Included |
| Zoning or land-use approval | Included |
| Easement or right of way benefiting the land | Included |
| Approved subdivision plan | Included |
| Hotel operating licence (personal to the operator) | Generally excluded |
| Brand or franchise agreement | Excluded (not a real estate right) |
Worked Example
A developer buys a plot for SAR 30,000,000. The contract splits the price into SAR 22,000,000 for the land and SAR 8,000,000 for “transfer of approved permits and plans”. The permits relate to the plot and cannot be used elsewhere. Under Article 2(d), the base is SAR 30,000,000 and RETT is SAR 1,500,000, not SAR 1,100,000.
Common Mistakes
- Pricing permits separately to reduce the base.
- Including operator licences that are not inseparable from the land.
The Bottom Line
Article 2(d) taxes property together with the rights and approvals that make it valuable. Split out only what is genuinely separable, and be ready to justify it.
Key takeaways
- Article 2(d) includes permits and real rights that are inseparable from the property in its RETT value.
- Examples include building permits and approved plans, zoning and land-use approvals, and easements such as rights of way that run with the land.
- 'Primary' rights in rem include ownership and usufruct. 'Secondary' rights include security-type rights attached to the land.
- A separate price for 'permits' or 'development rights' sold with the land is part of the RETT base.
- Licences personal to an operator, such as a business or hotel operating licence, are not inseparable from the land and are generally outside the base.
- ZATCA's Guideline confirms that the taxable value includes all inseparable elements, including licences and original or accessory real rights.
Frequently asked questions
Is the value of a building permit subject to RETT?
Yes, where the permit is closely linked to the property and cannot be separated from it. Article 2(d) of the RETT Implementing Regulations includes such permits in the property's total value. A separately priced 'permit' component of a land sale is part of the 5% base.
Are easements included in the RETT value?
Easements and similar real rights that attach to the land and pass with it are inseparable rights in rem, so their value forms part of the RETT base.
Is a business operating licence included in RETT?
Generally not. Licences personal to an operator, such as commercial registrations or hotel operating licences, are not inseparable from the real estate. Their value, if allocated, is outside the RETT base, but expect ZATCA to scrutinise the allocation.
Sources
Based on the RETT Law (Royal Decree No. M/84, effective 10 April 2025), the RETT Implementing Regulations (ZATCA Board Resolution No. 01-03-25 dated 24 March 2025, unofficial English translation) and ZATCA's Detailed RETT Guideline Version 6 (May 2026). The Arabic text prevails. This article is general information, not advice on any specific transaction. dariba.co is an independent knowledge platform and is not affiliated with ZATCA.
