No real estate tax payable if you (effectively) sell yourself a property you already own –Zatca

Property owners aren’t on the hook for real estate transaction tax (Rett) if they’re just moving ownership from one pocket to another, the Zakat and Tax Authority (Zatca) said in a statement.

The 5% Rett comes into effect any time an owner sells a property to someone else. Zatca is offering comfort to property holders that they won’t be taxed in some cases where they make their real estate assets an “in-kind” contribution to another investment.

Property owners won’t be required to pay the Rett if:

• They’re contributing a property they own to a real estate investment fund instead of using cash to subscribe to the fund. Owners can contribute a property to a fund at any time and different kinds of real estate funds (subject to a handful of terms and conditions);
• They’re transferring ownership of a property to a company in which they already hold shares.