Less than forty-five days remain before the recently issued value-added tax system takes effect, and the system’s implementing regulations have specified a number of real estate transactions covered by the system, such as demolition, construction, maintenance, and similar real estate activities, in addition to the goods and services provided upon which the sector is primarily based.

In this regard, real estate expert Mr. Khalid bin Abdullah Al-Saab, CEO of Aswar United, explained that the value-added tax is an additional source of revenue for the state, increasing its income—which is a positive aspect—and does not benefit investors or real estate developers. Al-Saab stated in an exclusive interview with Amlak Real Estate Newspaper that the low rate of the value-added tax will make its impact negligible for consumers, as it does not exceed 5%, meaning it will not affect the price of the final product.

Al-Saab noted that the value-added tax system encourages investment in the residential sector and incentivizes investors to offer their properties at reasonable prices. The system also helps prevent a glut of real estate products and fosters innovative marketing mechanisms.