GAZT has amended the format of the VAT return relating to the sale of first homes to Saudi Citizens has been saved
GAZT has amended the format of the VAT return relating to the sale of first homes to Saudi Citizens
The Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) has amended Box 2 of the VAT return relating to the sale of first homes to Saudi citizens. The reference to first home (referred to as first house on the old version of the VAT return) has now been removed from the VAT return.
Earlier this year, GAZT has indicated that the government would bear the VAT amount on behalf of citizens on purchases of first homes up to SAR 850,000. Until now the mechanism for this relief was unclear. It now appears that
the taxable person making the sale of a first home to a Saudi citizen is required to charge VAT on the full amount (including the first SAR 850K). We understand the VAT on the first SAR 850K will need to be claimed by the citizen directly from the Ministry of Housing.
Taxpayers impacted by this change will be banks & finance houses (Islamic financing) and property developers (selling directly to customers). These taxpayers may have to revisit the VAT treatment of previous transactions.
We will publish further details as they become available.