In brief
Where a real estate disposal is not notarized, Article 4 sets its date: the date possession passes for the purpose of ownership, the date a usufruct of more than 50 years is granted, the date ownership actually passes in a BOOT project, the earlier of share transfer or unconditional agreement for real estate company shares, the notarization date for off-plan sales, and the date of the disposal that broke an exemption's conditions. Otherwise, the earlier of an unconditional agreement or actual transfer applies.
Most RETT is paid at the notary. Before the transfer can be completed, the seller pays the invoice generated through ZATCA’s portal, and the transaction date is the notarization date. The rule is simple and hard to get wrong.
Many taxable transactions never reach a notary, though. Long-term usufructs, BOOT handovers, share deals in real estate companies and possession-based transfers are all examples. Article 4 decides when each of these happens for tax purposes. That date determines when payment is due, and when fines start if it is late.
The Provision: Exact Text
What It Means in Plain English
The RETT due date for a notarized sale is the notarization date. For transactions that are not notarized, Article 4 sets the date by type of transaction. The general fallback is the earlier of signing an unconditional agreement or actually transferring ownership. The Article 5 payment deadlines then run from that date.
Breaking Down the Seven Rules
| Rule | Transaction | Transaction date | Payment (Art. 5) |
|---|---|---|---|
| 4(a) | Possession transferred for the purpose of ownership | Date the property is placed in the transferee’s possession | Within 30 days |
| 4(b) | Usufruct of more than 50 years | Date the right is granted, unless cancelled within 30 days | Within 30 days |
| 4(c) | BOOT project | Date ownership actually passes, when all contractual conditions are met | Within 30 days |
| 4(d) | Shares in a real estate company | Earlier of share transfer or unconditional agreement | Within 30 days |
| 4(e) | Off-plan sale | Date of notarization of the ownership transfer | On or before notarization |
| 4(f) | Breached conditional exemption | Date of the disposal that broke the conditions | Within 30 days of the breach |
| 4(g) | Any other non-notarized disposal | Earlier of unconditional agreement or actual transfer | Within 30 days |
4(a): Possession for the purpose of ownership
If the buyer takes possession as owner before any notarization, for example under an informal sale where the keys are handed over and the deed is to follow, the transaction date is the date of possession. The words “for the purpose of owning it” exclude ordinary leases and licences.
4(b): Long usufructs and the 30-day cancellation window
A right to use real estate for more than 50 years is a taxable transaction under Article 2(f). It is dated to the grant. If the grant is cancelled within 30 days, no taxable transaction arises.
4(c): BOOT
ZATCA’s Example 12 shows the effect. Under a 25-year BOOT contract, tax is due when ownership passes at the end of the 25 years. If the contract provides for transfer after 12 years once conditions are met, tax is due at that point. Valuation also follows the transfer date, under Article 2(g).
4(d): Shares
An unconditional agreement to transfer shares in a real estate company sets the date even before the shares move. A share purchase agreement with outstanding conditions precedent, such as regulatory approvals, is not unconditional until those conditions are satisfied or waived.
4(e): Off-plan
Off-plan sales are dated to the notarization of the ownership transfer, not to the reservation or sale contract. That fits the way off-plan sales are paid for and handed over in stages.
4(f): Breached exemptions
When a conditional exemption fails, the tax becomes due by reference to the disposal that broke the conditions. The original transaction is then taxed on its value, and Article 5(A)(2) allows 30 days from the breach to pay.
4(g): The general rule
For any other non-notarized disposal, the date is the earlier of an unconditional agreement and the actual transfer of ownership. ZATCA’s Guideline adds that the date may be established “by all means and circumstantial evidence”. If there is no paperwork, ZATCA will reconstruct the date from the facts.
ZATCA’s Position
The Guideline says the general due date is the notarization date, and that a transfer cannot be notarized until the tax is paid or an exemption is confirmed. For informal documents, tax is payable “within (30) calendar days from the date of the contract, the final agreement, the transfer of ownership, or the date on which all conditions related to the transfer of ownership are met” in a BOOT project, and late payment attracts a penalty.
Example 11 in the Guideline: a farmer is granted a usufruct over land for more than 50 years under an unofficial agreement. The grantor must register the transaction on ZATCA’s portal and pay within 30 days of the grant.
Worked Examples
Example 1: Informal sale with early possession
A seller hands a villa to a buyer on 1 March under a signed sale agreement. Notarization is delayed for paperwork reasons. Under Article 4(a), the transaction date is 1 March. RETT on a SAR 2,000,000 price (SAR 100,000) must be paid by 31 March. Fines of 2% per month run from 1 April if it is not paid.
Example 2: 60-year ground lease
A landowner grants a developer a 60-year usufruct on 10 June. On 2 July (day 22), the parties cancel the grant. No taxable transaction arises. Had they cancelled on day 40, the grant would have been taxable from 10 June.
Example 3: Share purchase with conditions precedent
A buyer signs an SPA on 1 May for 40% of a real estate company. Completion is conditional on bank consent, which is obtained on 15 June, and the shares transfer on 30 June. The agreement becomes unconditional on 15 June, so that is the transaction date, and payment is due by 15 July.
Grey Areas
| Situation | Our view |
|---|---|
| SPA where only purely administrative steps remain after signing | Likely unconditional at signing. Do not rely on administrative steps to defer the date. |
| Possession given under a lease with an option to buy | Possession is not “for the purpose of owning it” until the option is exercised. |
| Usufruct cancelled on day 31 | Outside the 30-day window. Treat it as taxable from the grant date, and consider whether a refund under Article 9 is available. |
Compliance Checklist
- Identify whether the transaction will be notarized. If so, pay before notarization.
- If not, classify it under Article 4(a) to (g) and document the date.
- Calendar the Article 5 payment deadline, which is 30 days in most cases.
- Register on ZATCA’s portal and pay within the deadline.
- Keep evidence of the date, such as the possession handover, the CP satisfaction letter or the grant deed, for five years.
Common Mistakes
- Waiting for a deed that never comes. Informal transfers are taxable from possession or agreement.
- Assuming a BOOT contract is taxed at signing. It is taxed when ownership passes.
- Overlooking the date set by an unconditional agreement in share deals.
The Bottom Line
Article 4 replaces the notarization date for transactions that never reach the notary. Classify the transaction, fix the date and diary the payment deadline. Most fines on non-notarized transactions arise because parties did not realise the tax clock had already started.
Key takeaways
- For notarized sales, RETT is due on the notarization date and must be paid on or before it. Article 4 deals with transactions that are not notarized.
- Possession transferred for the purpose of ownership is taxed from the date the property is placed in the transferee's possession.
- A usufruct of more than 50 years is taxed from the date it is granted, unless it is cancelled within 30 days.
- BOOT projects are taxed when ownership actually passes, meaning when every contractual condition for transfer is met, not when the contract is signed.
- Real estate company share transfers are taxed from the earlier of the share transfer or an unconditional agreement to transfer.
- The general rule in Article 4(g) is the earlier of an unconditional agreement or the actual transfer of ownership. A contract with unsatisfied conditions precedent is not yet unconditional.
Frequently asked questions
When is RETT due on a property sale in Saudi Arabia?
For a sale notarized at the notary or an accredited notary, RETT is due on the notarization date and must be paid on or before it. The notary will not complete the transfer until the tax is paid or an exemption is confirmed. For transactions that are not notarized, Article 4 of the RETT Implementing Regulations sets the transaction date.
When is RETT due on a long-term usufruct right?
On the date the right to use is granted, for usufructs of more than 50 years, unless the grant is cancelled within 30 days. The tax must then be paid within 30 days of that date under Article 5(B).
When is RETT due on a BOOT project?
On the date ownership actually passes to the transferee, which is when all the contractual conditions for the transfer are met. ZATCA's Guideline gives a 25-year BOOT contract as an example: tax is due at the end of the 25 years, when ownership transfers.
When is RETT due on a transfer of shares in a real estate company?
On the earlier of the date the shares are transferred or the date an unconditional agreement to transfer them is concluded. Tax must be paid within 30 days of that date (Article 5(A)(1)).
Does signing an SPA trigger RETT?
For a transaction that will be notarized, ZATCA's Guideline treats the notarization date as the due date. For transactions that are not notarized, Article 4(g) applies the earlier of an unconditional agreement or actual transfer, so a binding SPA with no outstanding conditions can set the date.
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.
