Article 7 of the Saudi Real Estate Transaction Tax Law
المادة 7 من نظام ضريبة التصرفات العقارية
The article makes the disposer responsible for the tax and for paying it to the Authority, and makes the transferee jointly liable if it is proven to the Authority that he caused the non-payment.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يكون المتصرِّف مسؤولاً عن الضريبة المستحقة، وعليه سدادها للهيئة؛ وفقاً للإجراءات وفي المواعيد التي تحددها اللائحة، وذلك دون إخلال بحكم المادة (الخامسة) من النظام.
2- يكون المتصرَّف له مسؤولاً - بالتضامن مع المتصرف - عن سداد الضريبة المستحقة، وذلك في الحالات التي يثبت فيها للهيئة أنه كان سبباً في عدم سداد الضريبة المستحقة.
3- لأغراض تطبيق أحكام هذه المادة، يُقصد بالمتصرّف من يتم التصرف العقاري لمصلحته.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 7 explained in plain English
This article specifies who bears responsibility for the tax toward the Authority:
- The disposer is the primary person responsible: the disposer (such as the seller) is responsible for the due tax, and must pay it to the Authority in accordance with the procedures and at the times set by the Regulations. This is without prejudice to Article 5, which requires payment on the date of the disposition, allows it before, and allows it after in the cases the Regulations specify.
- The transferee's joint liability in a specific case: the transferee (such as the buyer) becomes jointly responsible with the disposer for paying the tax, but only in cases where it is proven to the Authority that he was a cause of its non-payment. Merely being a buyer does not make him responsible.
- What "disposer" means here: for the purposes of this article, the disposer is the person for whose benefit the disposition is made. If an agent sells real estate on behalf of its owner, the person responsible under this article is the owner for whose benefit the disposition took place, even though the definition of disposer in Article 1 includes someone acting on behalf of another.
This article is linked to Article 6, which prevents sham or concealed dispositions and requires the tax to be calculated on the real disposition, and to Article 8, which gives the Authority, within a period not exceeding three years from the date of the disposition, the power to verify the disclosed value and recalculate the tax if it is proven to be lower than the limits of fair market value.
Who actually bears the tax between seller and buyer is a matter the contract may address, but the article specifies responsibility toward the Authority. In a dispute, you should consult a lawyer who specializes in real estate and tax cases.
Practical example
Salman authorized his brother to sell his apartment in Riyadh, and the brother sold it to a buyer. The person responsible for the tax toward the Authority is Salman, because the disposition was made for his benefit. If it were proven to the Authority that the buyer was a cause of the tax not being paid, he would become jointly responsible with Salman.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
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Frequently asked questions about Article 7 of the Saudi Real Estate Transaction Tax Law
Who pays the real estate transaction tax?
The disposer is responsible for the due tax and must pay it to the Authority in accordance with the procedures and times set by the Regulations.
When is the buyer responsible for the tax?
The transferee is jointly responsible with the disposer in cases where it is proven to the Authority that he was a cause of the due tax not being paid.
If an agent sells the property, who is responsible for the tax?
For the purposes of this article, the disposer is the person for whose benefit the real estate disposition is made.
Articles this article refers to
More articles on Paying the Real Estate Transaction Tax
- Article 4
The article makes the real estate transaction tax due on the date of the disposition, treats that date by law as the date of documentation, and refers to the Regulations for the date where there is no documentation.
1- تُستحق الضريبة في تاريخ التصرف العقاري، ويكون تاريخ التصرف العقاري - حُكماً - هو تاريخ توثيقه. 2- تضع اللائحة الأحكام المتعلقة بتحديد تاريخ التصرف العقاري في
- Article 5
The article requires the real estate transaction tax to be paid to the Authority on the date of the disposition, allows payment before it, and exceptionally after it in cases the Regulations specify.
1- تُسدد الضريبة للهيئة في تاريخ التصرف العقاري، ويجوز سدادها قبله. 2- استثناءً من الفقرة (1) من هذه المادة، يجوز سداد الضريبة بعد تاريخ التصرف العقاري، وذلك في
- Article 19
The article allows the Authority to coordinate with government bodies, and bars anyone authorized to notarize from notarizing a real estate transaction whose tax was unpaid at the date of notarization, without prejudice to Article 5(2).
1- للهيئة التنسيق مع الجهات الحكومية في كل ما له علاقة بتنفيذ أحكام النظام واللائحة. 2- دون إخلال بحكم الفقرة (2) من المادة (الخامسة) من النظام، يجب على كل شخص
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.