Approved Amendments to the RETT Implementing Regulations

The Zakat, Tax and Customs Authority (ZATCA) has approved amendments to certain provisions of the Real Estate Transaction Tax (RETT) Implementing Regulations. These modifications, initially open for public consultation on 5 December 2023, have now been officially enacted.

Published in the official Gazette on 3 May 2024, these amendments are effective as of the same date.

Key amendments include: 

  • Expanded Exemption for Real Estate Investment Funds (Article 3.A.15). Changes include: 
    • Extending the exemption to funds for income generation/leasing, not just those for development and sale.
    • Removal of the restriction on real estate transfer timing, allowing transfers at any point for eligibility.
    • Introduction of new eligibility conditions, such as the non-disposal of fund units corresponding to real estate transfers until termination, liquidation, or five years from subscription/ownership, whichever is earlier.
  • Amendments have been made to two articles regarding Transaction Date and Tax Due Date Determination for Build-Own-Operate-Transfer (BOOT) Contracts:
    • The transaction date is now defined as the date of actual ownership or possession transfer to the transferee (Article 4).
    • RETT is due within 30 days of the actual ownership or possession transfer to the transferee (Article 4B).
  • New Provision regarding Ownership Percentage Change (Article 3A): 
    • Change in ownership due to public offering of company shares or fund units no longer violates ownership percentage conditions post-exemption application.

Deloitte’s view

The approved amendments broaden RETT exemptions, offering clarity and encouragement for real estate investment and market activity. Below are the key observations: 

  • The expanded exemption scope for fund contributions is a significant development for the sector.
  • Amendments to Article 3A signal government support for Initial Public Offerings (IPOs), aligning with increased company registrations on Tadawul.
  • Clearer guidelines on RETT for BOOT projects and payment deadlines benefit taxpayers, although certain issues remain, with the key one being the valuation of contracts for the levy of RETT.


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