Refunds cover property sold by individuals between 2018 and 2020.
People who sold property in Saudi Arabia between 2018 and 2020 and paid value-added tax on the sale can now claim it back. But the window closes next week.
The General Secretariat of the Zakat, Tax and Customs Committees has started accepting refund claims for VAT on property sold by individuals between Jan. 1, 2018, and Oct. 4, 2020, Argaam reported on Wednesday.
Claims must be filed within 30 days of the rules appearing in the Official Gazette on Oct. 13. That puts the deadline at around Nov. 12.
Why now: property sales used to carry 15% VAT. In October 2020, the government replaced it with a 5% real estate transaction tax, and the refunds cover private sellers who paid VAT before the switch.
Who qualifies: the seller must be an individual who paid the VAT to the Zakat, Tax and Customs Authority, and must not be in the business of selling property.
Anyone who made more than one sale in any 12-month period, with a total above the VAT registration threshold, is out.
How much is at stake: refunds could reach several billion Riyal, Michael Camberon, Deloitte Middle East's indirect tax services leader, told Argaam.
More than 255,000 residential deals were recorded in 2020 alone, he said, with homes typically selling for between 250,000 and 900,000 Riyal ($67,000 and $240,000).
The catch: in many deals, the buyer paid the VAT as part of the price, while the seller passed it on to the tax authority. Specialists told Argaam that could spark disputes over who the money really belongs to.
The bigger picture: Camberon expects relatively few claims, given how long ago the sales took place and how short the window is. If the money goes back into property, though, it could give the market a small, short-term lift.
What to watch: whether the deadline is extended, and how the committees handle buyers who say the refund is theirs.
