The taxes levied on real estate purchases comprise:
- Value Added Tax: Value added tax in the Kingdom of Saudi Arabia is imposed on revenues and sales related to real estate. The VAT rate is levied on the value of the property sold or rented. This tax applies to a wide range of properties, including villas, apartments, residential and commercial land.
- Income tax: An income tax is applied to real estate in the Kingdom of Saudi Arabia when renting real estate, as it is imposed on the net income generated from renting the property. The owner is obligated to file tax returns and pay the taxes due in accordance with tax legislation.
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