Saudi Arabia: Proposed Amendments to the RETT Regulations

Exemption from RETT application on disposal of real estate to a company is proposed to be extended to any person provided that real estate was recorded in the company’s assets before the effective date of the regulation and that person is a shareholder in that company on the date the real estate is recorded in the company's assets. Currently it is limited to shareholder/co-owner.

The certification required vis-a-vis inclusion of real estate in the company’s assets before the effective date of RETT regulations is now proposed to be obtained from a licensed Public Accountant currently it is required from a licensed Chartered Accountant.

RETT exemption on disposal of real estate as an in kind contribution is proposed to be extended to all types of real estate funds. Currently real estate funds established for renting purposes are excluded from this exemption.

The above exception will be conditional on (i) non disposing of the fund’s units or shares related to real estate disposal until the date of termination or liquidation of the fund; or (ii) for a period of five years from the date of registration or ownership of the units or shares, whichever comes first.

Change in the ownership percentage by listing or re-listing of shares of the company or a fund in accordance with the rules and regulations of the Capital Market Authority will not be considered as breach of the condition of not disposing of the shares or units related to the exempted real estate disposal.

The date of disposal in relation to the build, own, operate and transfer projects will be the date of actual transfer of ownership or possession to whom the real estate is disposed to has been proposed to be added.