Saudi Arabia makes exceptions to the property tax regulation

Saudi Arabia makes exceptions to the property tax regulation

The building and construction movement is reviving investments in the interior design sector


Saturday – 22 Muharram 1444 AH – 20 August 2022 AD Issue No. [
15971]


The construction and housing movement is pushing the interior design activity to flourish in Saudi Arabia (Middle East).

Riyadh: Fath Al-Rahman Yusuf

From yesterday (Friday), Saudi Arabia started working on some amendments to the executive regulations of the real estate tax, which included a number of exceptions, in particular the disposal of real estate by any person to a real estate developer licensed to engage at off-plan sales and rental activities, provided the property is designated for a sales project on the map.
It is known that the Ministry of Municipal and Rural Affairs and Housing in Saudi Arabia has an off-plan sales and rental program “Wafi” that aims to organize the sector, regardless of its purpose or method, before or during the development and construction phase, obliging developers to implement according to the timetable for each project according to the approved models and specifications, in a step It aims to stimulate the supply and increase productivity to produce housing products at the right price and quality to provide.
The Zakat, Tax and Customs Authority clarified that among other exceptions, the sale of real property by a natural person to a company that owns all its shares or shares, provided that there is no change in the percentage of ownership is for a period of no less than 5 years, and the disposition of the product between companies whose shares or shares are all owned by the same person, provided that there is no change in the ownership percentage in the holding company for a period of not less than 5 years.
The exceptions included the disposal of the property without compensation to a company established in the Kingdom, all its shares or shares held by an atomic or charitable endowment, provided that there was no change in the ownership percentage of the company alienating it for a period of time. of 5 years, in addition to a new exception related to the return of the property to its previous owner due to cancellation The property disposition documented by mutual agreement between its parties, within a period of no more than 90 days from the date of the authentication subject of the cancellation, provided there is no change in the product description and a full refund of its value.
The real estate transfer tax is imposed at 5% of the total value of the real estate transfer, whereby the ownership of the real property is transferred from one person or facility to another, either by sale, exchange, gift and the like, with some dispositions excluded in accordance with the provisions of the regulation.
Any property disposal process must be recorded on the designated platform, explaining the exact data of the property and specifying the exception related to property disposal, before emptying is done at the justice offices or the accredited notary.
The General Secretariat of the Off-plan Sale or Rent Committee “Wafi” recently issued 260 different licenses for off-plan sale, rental and marketing projects during the first half of this year, with a total of more than 62.3 thousand property units, in continuation of its role in organizing the off-plan sales and rental market and increasing the level of transparency in it and investment support to improve the property supply of land and housing units in accordance with the objectives of the Housing Program – one of the programs of the Kingdom’s Vision 2030 – to increase the proportion of housing ownership for Saudi families to 70 percent.
Wafi explained that during the first quarter of this year, the committee issued 141 off-plan sales and marketing licenses with a total of more than 19.5 thousand property units.
During the second quarter, the committee issued 119 licenses with a total of 42.7 thousand units, with a growth rate of 118 percent compared to the first quarter of this year, in continuation of the continuous efforts to increase the supply of real estate units in total increase categories.
On the other hand, specialists expected a revival of investment in the interior design sector with the boom of the Saudi construction sector, which amounts to 24 billion dollars, at a time when a report on “Business Eswer”, the global market for interior design, services, is poised to grow by $24.13 billion by 2025 and is expected to reach $255.4 billion by 2027.
This comes at a time when the “Saudi Index” exhibition is preparing to launch its activities in the field of interior design and the prosperity of the sector in the Kingdom from September 6 to 8 in Riyadh, with the participation of design experts, lighting technology, hospitality and project management, to present the requirements of interior design for projects. Residential, commercial and office, at a time when specialists attributed the growth of investment in the core sector, due to the boom in construction activities, the growth of demand from the commercial infrastructure sector, improving the standard of living and providing premier interior design services.
Specialists have highlighted the growing demand for interior design services in the Kingdom, due to the boom in the real estate and construction sector in Saudi Arabia, which explains the increasing demand for high-quality interior products and services, noting that Saudi Arabia is one of the fastest growing real estate markets in the world, with projects worth reaching Active construction planned in the Kingdom 1.5 trillion dollars, investment in the construction of residential and commercial projects alone is expected to reach approximately 10.7 billion dollars .
Jasmeet Bakshi, a specialist in the design sector, said: “Saudi Arabia has become a magnet for investment in the sector, fueling the boom in high-quality interior products and services, including furniture, lighting, decor, accessories and textiles. explained among others. , for the hospitality, commercial, residential and retail sectors. And with the Kingdom’s economy growing stronger in the post-pandemic period.”
International companies in the field of industry-level design participated internationally in the “Index Saudi” exhibition to contribute products and solutions from Poland, Portugal, Italy, France, the Emirates, the Netherlands, the United Kingdom, India, Pakistan, Turkey . , Morocco, Germany, South Korea, Russia, the Czech Republic and Serbia, with the participation of major global investments in the industry with their practicing counterparts designed in the UK.
The two-day Saudi Index Forum and Exhibition will highlight key topics around healthy lifestyle designs, metaverse, cultural and heritage architecture, luxury hospitality and technology in design, while highlighting young Saudi designers through case studies and vision-based insights. Research and value-based content.


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