In one sentenceA tax of 5% of the value of a real estate disposal, such as a sale, gift or transfer of ownership, paid before the transfer of ownership is completed.
Simply put
When a property is sold or its ownership transferred in any form, 5% of the disposal value is calculated and paid to ZATCA before the title transfer.
A property sale is in principle subject to this tax, not to VAT, so do not mix them up when pricing or recording the deal.
Worked example
A contracting business sold land it owns for 800,000 SAR.
Disposal value800,000 SAR
Rate5%
Calculation800,000 × 5%
Real estate transaction tax40,000 SAR
Formula: Tax = disposal value × 5%
Don't confuse it with
Value added taxVAT is imposed on goods and services at 15%, while the real estate transaction tax is imposed on the transfer of property ownership at 5%.