Who pays the 5% transaction tax?
Film, 1 min 7 s
By law it's the seller, and agreeing that the buyer will bear it doesn't move that liability. Both of those are true at once.
Updated 10 April 2025
What the film says
Who pays it?
Who actually pays the five per cent transaction tax? Almost every listing you'll read gets this wrong.
By law, and in practice
By law it's the seller, and agreeing that the buyer will bear it doesn't move that liability. In practice, the tax authority's own guideline says the parties customarily agree the buyer pays. Both of those are true at once.
5% of the transfer value
The tax is five per cent of the transfer value, and it's paid before the transfer is completed at the notary.
Charged on which value?
And the value it's charged on is the price you agreed — unless that sits below fair market value, in which case the market value is used instead.
صك
There's one word worth knowing, and it's on screen. It's the deed the notary issues once the tax is settled — the document that says the property is yours.
What sits outside it
Two transfers sit outside the tax altogether: an estate divided within the lawful shares, and a notarised gift to a spouse or a relative to the third degree.
Budget it as yours, and put it in writing
So budget the five per cent as yours, put it in the contract, and don't let a listing tell you otherwise.
Drawn from the sources on this site and narrated by a synthetic voice. Information, not legal or financial advice.
Sources
ZATCA — Detailed Guideline for the Real Estate Transaction Tax, version 6 (May 2026), section 10.3
Under Article 7(1) of the RETT Law the assignor (seller) is the person liable to pay the 5% Real Estate Transaction Tax to ZATCA, and an agreement for the buyer to bear it does not relieve the seller of that liability.ZATCA — Detailed Guideline for the Real Estate Transaction Tax, version 6 (May 2026), section 5.1
ZATCA's RETT guideline states that although the assignor (seller) bears the tax by law, it is customary in practice for the parties to agree that the assignee (buyer) bears it.ZATCA — Detailed Guideline for the Real Estate Transaction Tax, version 6 (May 2026), section 6
ZATCA issues the RETT invoice at 5% of the transfer value and the tax must be paid before the transfer is completed at the notary, even where the parties have agreed that the buyer pays it.ZATCA — Detailed Guideline for the Real Estate Transaction Tax, version 6 (May 2026), section 4.2
The RETT base is the value agreed between the parties, provided it is not less than the fair market value on the date of the transaction.ZATCA — Detailed Guideline for the Real Estate Transaction Tax, version 6 (May 2026)
ZATCA's RETT guideline treats a transfer resulting from the division of an estate within the lawful shares, and a notarised gift to a spouse or a relative up to the third degree, as outside the 5% real estate transaction tax.
Where each fact above comes from, with the source’s own date where it gives one.
