Latest news with #RETT
Zawya
15-07-2025
- Business
- Zawya
Robust economic growth fuels Saudi real estate performance
Saudi Arabia's robust economic growth, driven by a 4.9% expansion in non-oil GDP, is fuelling strong performance across the real estate market, according to CBRE Middle East, a global leader in commercial real estate. The second quarter witnessed a dynamic and evolving real estate landscape in Saudi Arabia, driven by a combination of policy adjustments and strategic initiatives, stated CBRE in its 'Q2 2025 Saudi Arabia Real Estate Market Review. Real GDP in Q1 2025 expanded by a robust 3.4%, though the full-year forecast has been adjusted to approximately 3.5% due to a more conservative outlook for the oil sector. The kingdom remains committed to its Vision 2030 initiatives and fostering sustainable economic growth. The implementation of the Real Estate Transaction Tax (RETT) and strategic realignments within the construction sector shaped the market dynamics. Moreover, the kingdom's logistical prowess improved, with a rise in the Agility Emerging Markets Logistics Index, stated the CBRE report, which highlights strong growth across key sectors. The Hail region attracted substantial investment, demonstrating its strategic importance, while several major mixed-use developments, such as Osus Eye in Riyadh, the Pulse Wadi District, and the ongoing advancement of the Dar Al Hijra project in Madinah, underscored the Kingdom's commitment to economic diversification and urban growth. According to CBRE, the office market in Saudi Arabia thrived in Q2 2025, characterised by key trends. The demand for office space, especially Grade A properties in Riyadh, remains high, leading to rising rental rates and exceptionally high occupancy levels. The government's Regional Headquarters (RHQ) Program continues to drive demand, attracting international companies. The rise in the flex sector and the preference for smaller, efficient office spaces are also notable. Although a limited new supply in 2025 is expected to exacerbate the market dynamics, the outlook is positive, with increased supply anticipated in the coming years, along with strong performance in Jeddah. Looking at the Residential real estate market in Saudi Arabia significant growth and investment were witnessed in Q2 2025, particularly in Riyadh. Driven by strong demand, transaction volumes were substantial, with land sales leading the way. Government support and initiatives are actively promoting development and attracting both local and international investors. New project launches, such as Azure's Lamara project and ROSHN Group's ALDANAH community, alongside new investment funds, are fueling the sector's expansion and commitment to addressing the Kingdom's housing goals. CBRE pointed out that the Q2 2025 saw a dynamic retail sector in Saudi Arabia, marked by the rise of 'Retailtainment' and the expansion of entertainment hubs. The increasing integration of entertainment into malls and the substantial investments by Saudi Entertainment Ventures (SEVEN) are key drivers of this transformation, it stated. Despite a slight dip in sales during the Eid holiday, the sector is navigating challenges like oversupply and e-commerce through innovative projects and strategic adaptations. Stable rents and occupancy rates in super-regional malls and the addition of new developments are adding to the evolving retail landscape, it added. Significant developments in Saudi Arabia's Industrial and Logistics sector supported the country's economic diversification efforts in Q2 2025. CBRE pointed out that there was robust demand for warehousing despite challenges in finding immediately available, high-quality facilities. A major investment in a $7 billion cross-country rail corridor will enhance logistics capabilities, it stated. Average warehouse rents are increasing, reflecting strong demand. The launch of the Advanced Manufacturing and Production Center and collaborations like the one between Saudi Aramco Technologies and BYD are driving industrial transformation and innovation, it added. Matthew Green, Head of Research Mena, said: "This groundbreaking regulation marks a pivotal moment for Saudi Arabia's real estate market. By welcoming foreign investment, we anticipate a transformative shift, driving substantial growth in inbound capital over the next five years." "This will not only support the ambitious FDI targets but also stimulate private sector development, further diversify the non-oil economy, and generate wealth for landowners. Furthermore, it will foster long-term population growth and economic stability by enabling foreign residents to participate in homeownership, a significant social milestone," he added. Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Arab News
10-04-2025
- Business
- Arab News
Saudi Arabia introduces 5% tax on real estate transactions
JEDDAH: Saudi Arabia has introduced a 5 percent Real Estate Transaction Tax, effective from April 10, as part of its economic diversification efforts. The new tax, the Zakat, Tax and Customs Authority said, will apply to all real estate transactions across the Kingdom, including residential, commercial, and industrial properties. It will be levied regardless of the property's development status, usage, or whether the transfer involves full or partial ownership. It will also apply to undocumented transactions. To comply with the new regulation, all property transfers must be registered through the RETT platform on ZATCA's official website. Parties involved in a transaction will need to declare property details and any applicable exemptions before formalizing the transfer at a notary or legal authority. The introduction of the RETT is part of Saudi Arabia's broader strategy to foster growth in the real estate market, with expectations for significant expansion in 2025. In a recent report, real estate services firm JLL highlighted strong economic growth across the Gulf region, with Saudi Arabia leading the way. The Kingdom's non-oil sector is expected to grow by 5.8 percent in 2025, up from 4.5 percent in 2024. The construction sector performed well in 2024, with project awards totaling $29.5 billion. Furthermore, the Saudi real estate market is projected to reach $101.62 billion by 2029, growing at an annual rate of 8 percent from 2024. ZATCA stated on its official X account that the RETT regulation is designed to create a clear legal framework, foster growth in the real estate sector, attract investment, and enhance tax exemptions for economic, social, and regulatory goals. The new rules also aim to address challenges specific to the real estate industry. The newly approved regulations provide clarity on property transactions subject to tax, establish mechanisms for tax calculation, and outline payment procedures. They also introduce measures to ensure fair market value verification. Notably, the fine for delayed tax payments has been reduced from 5 percent to 2 percent. Exemptions include property transfers resulting from inheritance divisions, registered public and private endowments, and transfers between spouses or relatives up to the third degree.
Gulf Insider
09-04-2025
- Business
- Gulf Insider
Saudi Arabia's Real Estate Transaction Tax is A Game-Changer
Saudi Arabia's new tax rules on real estate transactions have taken effect, offering a significant boost to property ownership among its citizens. At the same time, the full benefits of the update Real Estate Transaction Tax will extend across all layers of deal-making in the sector, according to industry sources. The RETT brings in a flat 5% tax on most real estate transactions, 'including sales, transfers, and other property-related dealings, regardless of whether the parties are individuals or businesses'. The updated RETT came into effect Wednesday (April 9). When it comes to individual investors, there are specific exemptions, according to Naveen Sharma, Chairman of the Taxation Society. Family-related transfers: Transactions such as gifts between close relatives (up to the third degree), inheritance divisions, and spousal transfers are exempt from the 5% tax obligation. First-time homebuyers: Saudi citizens purchasing their first residential property are exempt from tax on properties valued up to SR1 million, with the government covering the tax for qualifying transactions2. Other exemptions: Transfers to charitable organizations, endowments, or under certain governmental housing initiatives are also RETT-exempt. 'While individuals are subject to the RETT on property transactions, these exemptions significantly reduce the tax burden for specific scenarios, particularly for Saudi nationals and family-related transfers,' said Sharma. Saudi Arabia has brought in a wave of reforms across its property market, the latest being measures taken to speed up availability of land for development and stabilize rentals in Riyadh. Then, there has also been the opening of freehold rights to foreign investors, the gains from which are starting to show up. These moves to open up the property market are backed by newly updated and transparent tax laws, which is what the RETT is all about. 'The new RETT marks a transformative step in Saudi Arabia's real estate market,' said Sharma.
