Cairo: Saudi Arabia will exempt real estate transactions from a 15 per cent VAT (value-added tax) and instead impose a new 5 per cent tax on property deals, according to a Royal Order issued Friday. The Saudi finance minister said on Twitter that the order also aimed to support Saudi citizens who want to buy homes.
The country is facing a deep recession, with the economy shrinking by 7 per cent in the second quarter and unemployment hitting a record high of 15.4 per cent. The government had in July tripled VAT to 15 per cent to boost non-oil revenues, but the move set off limited domestic demand.
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The housing minister said the move would help achieve a target of boosting housing ownership by Saudis to 70 per cent by 2030 in a country with an overwhelmingly young population.
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