The RETT Tax Due Date: When Does RETT Become Payable?

The RETT Tax Due Date: When Does RETT Become Payable? | Dariba.co

The General Rule: Notarization, With Article 4 for Everything Else

Timing matters in RETT. Get it wrong and you are not just late on a payment — you are triggering fines, penalties, and potentially a ZATCA investigation. Understanding exactly when RETT becomes due is not a theoretical exercise; it is a compliance imperative for anyone involved in Saudi real estate transactions.

For most property sales, the answer is simple. ZATCA’s Detailed RETT Guideline (section 4.3) states that the tax-triggering event is the transaction itself, and that the due date is generally the date of notarization with the Notary Public or an Accredited Notary. The tax must be paid on or before that date. The notary will not complete the transfer until the tax is paid or an exemption is confirmed.

Article 4 of the Implementing Regulations covers the cases where notarization has not been carried out. Its opening words limit it to those cases. For such transactions, it sets a specific date by type, and its general rule in Article 4(g) is the earlier of (a) the date an unconditional agreement is concluded, or (b) the date ownership actually transfers.

The phrase “unconditional agreement” matters for those non-notarized deals. An agreement is unconditional when it binds both parties with no remaining conditions that could stop the transfer. A binding SPA with no outstanding conditions precedent qualifies.

Non-Notarized Transactions: Special Rules by Transaction Type

Article 4 of the Implementing Regulations specifies the RETT due date for categories of transaction where notarization does not occur. Each category has its own rule:

Payment Deadlines: How Much Time Does the Transferor Have?

The due date of RETT and the payment deadline for RETT are related but distinct concepts. Under Article 5 of the Implementing Regulations, different payment deadlines apply depending on transaction type:

Standard Notarized Transactions

For the majority of property sales that proceed through the Notary Public, RETT must be paid on or before the date of notarization. The notary serves as the enforcement mechanism — no payment, no title transfer. This is a hard deadline with no grace period built into the system.

Share Transfers in Real Estate Companies

Where RETT is triggered by the transfer of 30% or more of shares in a real estate company, payment must be made no later than 30 days from the earlier of: the date shares transfer or the date of the unconditional agreement (Article 5(A)(1)). There is no notary backstop here — the parties must proactively manage this deadline.

Non-Notarized Transactions (General)

For non-notarized transactions (usufruct rights, BOOT completions, possession transfers for ownership purposes), RETT must be paid within 30 days from the RETT due date as determined under Article 4 (Article 5(B)).

Off-Plan Sales

As a specific exception, for off-plan property sales, RETT must be paid on or before the date of notarization (Article 5(C)). This aligns with the general notarized transaction rule — the notary will not complete the transfer without RETT confirmation.

Conditional Exemptions That Become Taxable

If a previously exempt transaction loses its exemption status due to a breach of conditions, RETT must be paid within 30 days from the date of the breach (Article 5(A)(2)). The transferor must also notify ZATCA via a correction request within 30 days of becoming aware the data is incorrect or the exemption condition is breached.

The Off-Plan Exception: A Different Timeline

Off-plan transactions have a materially different RETT timing rule that is frequently misunderstood. When a buyer purchases a unit off-plan — before construction is complete and before a title deed exists — the RETT due date is the date of notarization with the Notary Public or Accredited Notary, not the date the off-plan purchase agreement is signed (Article 4(e)).

This means RETT is not due when the off-plan sale contract is executed. It is due when the completed unit is notarized — which could be one, two, or more years later. For developers managing large off-plan projects, this deferred RETT obligation must be built into financial planning. The RETT liability crystallises at completion, not at booking.

The same timing rule applies for resales of off-plan units before completion. If an off-plan buyer resells their unit before construction is complete, the RETT on that intermediate transfer is also due at notarization (once the property is completed and title is registered), not at the point of the intermediate assignment agreement.

Conditional Exemptions: When the Clock Runs Back

Several RETT exemptions are granted on conditions that must continue to be met after the transaction date. These include:

• The gift exemption: the donee must not re-dispose of the gifted property to a non-qualifying person within three years
• The in-kind contribution exemption: the shares received in exchange must be held for at least five years
• The wholly-owned group transfer exemption: ownership must remain within the same group for five years
• The merger and acquisition exemptions: continuing share/unit ownership conditions apply for five years

If any of these conditions are breached after the original transaction was granted an exemption, the original transaction becomes taxable. The full RETT that would have been due on it, calculated on its value, becomes payable. The timing runs from the breach, not from the original transaction. Article 4(f) ties the due date to the disposal that broke the conditions, and Article 5(A)(2) allows 30 days from the breach to pay. Late-payment fines start only after that window.

The transferor must submit a correction request to ZATCA within 30 days of becoming aware of the breach, and pay the RETT within 30 days of the breach date. Failing to do so adds penalty exposure on top of the principal RETT amount.