TaxSavvySA

Price below market value

Selling to a friend below market price. Tax on what value?

The situation

RETT is on the agreed price but not less than fair market value. ZATCA can ask for a valuation where the price looks low.

The law

  • Real Estate Transaction Tax Implementing Regulations (from 4 October 2020): 5 percent of the value of a real estate disposal, paid by the seller before or at notarisation

What it means for you

Example: agreed SAR 700,000, market SAR 1,000,000: tax on SAR 1,000,000 = SAR 50,000. ZATCA may ask for a valuation. Under-declaring can lead to fines.

What to do

  1. Get a valuation.
  2. Declare the higher value.
  3. Pay.

We can do this for youReal Estate Transaction Tax on a property sale: 5 percent RETT, exemptions and first home support: SAR 1,500

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