Who pays the real estate transaction tax, the seller or the buyer?

This answer was reviewed against official sources on 2026-10-05

Short answer

The seller, or more generally the person disposing of the property, is legally liable to pay the 5% Real Estate Transaction Tax (RETT) to the Zakat, Tax and Customs Authority (ZATCA) under Article 7 of the RETT Law. Seller and buyer may agree that the buyer bears the tax, but that agreement does not release the seller from liability towards ZATCA. The buyer becomes jointly liable with the seller if ZATCA establishes that the buyer caused the tax to go unpaid, for example by agreeing to declare a lower price than the real one.

What the law says

Article 7 of the RETT Law, issued by Royal Decree M/84 dated 19/3/1446H and in force with its Implementing Regulations since 10 April 2025, makes the person disposing of the property liable for the tax due and requires them to pay it to ZATCA. That person is the seller in a sale, the donor in a gift, and the grantor of a usufruct right lasting more than 50 years.

ZATCA’s guideline explains that the seller may agree otherwise with the buyer, which it says is common in practice, and that anyone may pay the tax invoice, while the seller remains liable towards ZATCA.

When the buyer is liable

Article 7(2) makes the buyer jointly liable with the seller in cases where ZATCA establishes that the buyer caused the tax to go unpaid. Examples given in the Implementing Regulations and the guideline include an arrangement between the parties to reduce the tax or not pay it on time; the guideline adds a buyer presenting a first-home eligibility certificate that later turns out to be incorrect. ZATCA then notifies both parties of the tax amount and the payment date.

Within 3 years of the transaction, ZATCA may check the declared value and recalculate the tax if it is below fair market value (Article 8).

When the tax is due and how it is paid

The tax is calculated on the agreed value, provided it is within fair market value, and excludes the deferral (financing) cost where the purchase is financed by a licensed lender (Article 2(2)). It falls due on the date of the transaction, which is the date it is notarised, and is paid on or before that date (Articles 4 and 5). Anyone authorised to notarise property transactions must not notarise one whose tax has not been paid (Article 19(2)).

For a transaction that is not officially notarised, such as one evidenced only by unofficial documents, the tax is paid within 30 days of the transaction date (Implementing Regulations, Article 5); ZATCA’s Detailed Guideline counts this as 30 calendar days from the contract, the final agreement or the transfer of ownership. Late payment carries a fine of 2% of the unpaid tax for each month or part of a month, capped at 50% of the unpaid tax, starting the day after the payment deadline (Article 15(2)).

Examples

In each example the tax is 5% of the transaction value:

A property sold for SAR 800,000: the tax is SAR 40,000, and the seller is liable for it before transfer even if the buyer agreed to pay.
Seller and buyer agree to declare SAR 1,200,000 for a property with a market value of SAR 2,000,000: the tax is calculated on the market value, SAR 100,000, and the buyer is jointly liable with the seller because they took part in reducing the tax.

Steps

Before title transfer, the seller signs in to ZATCA’s RETT platform (rett.zatca.gov.sa) through the National Single Sign-On (or with the tax identification number if a business) and registers the title deed, buyer details, transaction date and value, stating whether the transaction is legally exempt.
ZATCA issues a payment invoice for the tax (5% of the transaction value); the buyer may pay it if the parties have agreed so, but the seller remains the person liable to ZATCA.
The notary public or accredited notary completes the transfer after electronically confirming that the tax was paid or that the transaction is exempt.

Calculate it: Real Estate Transaction Tax (RETT) Calculator5% tax on property sales, and what the state bears for a first home.Calculate it: Real Estate Brokerage Commission CalculatorBroker commission on sales and leases (2.5%) with VAT.

Follow-up questions

Can the sale contract say the buyer pays the tax?

Yes, the parties may agree on that, and anyone may pay the tax invoice. But the agreement does not release the seller from liability towards ZATCA if the tax is not paid.

If the sale is cancelled, is the tax refunded?

Tax paid in excess or by mistake, or on a transaction that was not completed, is refunded (Article 9). It is also refunded for a notarised transaction cancelled by mutual consent within 90 days of notarisation, provided the property’s description is unchanged and its full value is returned. The refund request is made by the person who disposed of the property or their representative.

Who pays the tax on a gift of property?

The donor, as the person disposing of the property. A notarised gift to a spouse or a relative up to the third degree is fully exempt (Article 3), subject to the Regulations’ conditions, but it must still be registered on ZATCA’s service, choosing the exemption, to complete the transfer.

Official sources

General information for guidance, not legal advice; the governing regulations and official bodies are the final reference.

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