|22 July, 2019

Saudi government to bear VAT cost for former home-owners

Initially, exemption was only for first-time home owners

VAT increase Some growing stacks of coins with the word VAT on them. Image used for illustrative purpose

VAT increase Some growing stacks of coins with the word VAT on them. Image used for illustrative purpose

Getty Images/ Photography taken by Mario Gutiérrez.

Saudi Arabia will cover the VAT costs of buying new houses for its citizens, including those who previously owned houses, but sold them without benefiting from the tax exemption initiative, according to local Arabic paper Okaz.

In January last year, Saudi Arabia’s King Salman issued a royal decree stating that the government will bear the VAT for first-time home buyers in the kingdom on houses not exceeding 850,000 Saudi riyals in value.

The initiative will now include all Saudi citizens who sold their homes before or after the issuance of the royal decree, provided they do not own any housing during the registration period (as per the portal on the Ministry of Housing’s website) and had not previously benefited from the initiative.

The Saudi ministry of housing announced this month that it issued 58,792 VAT exemption certificates for first-time home buyers during the first half of 2019. This included 36,910 exemptions for the ministry’s beneficiaries, 9,095 exemptions to the Real Estate Development Fund’s (REDF) beneficiaries and 12,790 to others.

Saudi real estate loan disbursements to individuals rose by 16 percent in 2018 as government incentives to boost home ownership among citizens drove increased lending.

One of the popular initiatives, Sakani II, launched by the Real Estate Development Fund (REDF) along with the ministry of housing, aims to deliver 300,000 housing and financing products in Saudi Arabia. Read more here

(Writing by Nada Rifai; editing by Seban Scaria)

(nada.rifai@thomsonreuters.com)

Our Standards: The Thomson Reuters Trust Principles

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2019

More From GCC