New tax of 5 per cent, the Real Estate Transaction Tax will be levied though on property deals in place of the VAT. In a relief for first time Saudi home buyers, they will be exempted from the new 5 per cent tax too for transactions of up to SAR1m. The number of loans disbursed from January-August this year were over 22,000, a 78 per cent increase over the corresponding period last year when 12,039 loans were issued.
Combined value of the loans issued in first eight months of this year amounted to SAR10.1bn, up 94 per cent over the SAR5.2bn recorded last year over the same period. It also contributes to the development of the kingdom’s economy by stimulating the residential and commercial real estate sector. Saudi suspended an interest-free loan programme for military personnel which covers 20 per cent of a property, or up to SAR140,000 ($37,000). Another plan, which provided civilians with assistance up to SAR95,000, or 10 per cent of a property, was also paused.