Saudi Arabia accelerates real estate tokenization with Vision 2030: a tax guide investors should know

A wave of change is sweeping through Saudi Arabia’s real estate market. Driven by the push for economic digitalization under Vision 2030, the division of property ownership using blockchain technology is becoming a reality. High-value properties that were previously accessible only to large investors are transitioning into an environment accessible to everyone.

Why Tokenized Real Estate Opens Doors

With the registration bureau under the General Authority for Real Estate Development establishing national infrastructure, blockchain registration, property division, and marketplace integration have already been implemented. Ownership transfers via digital tokens are now possible, dramatically improving process transparency and speed.

These digital assets, functioning as Real World Assets (RWA), offer multiple utilization methods such as shared ownership, revenue sharing, rental income, and capital gains. Lower investment barriers and increased transaction liquidity are making real estate investment truly inclusive.

The Overall Tax Rules Investors Need to Know

Investing in tokenized real estate involves complex tax considerations. Saudi investors must calculate Zakat rules according to the classification of the tokens. Transaction-purpose tokens are taxed based on market value, while income-focused tokens are taxed on the generated revenue.

For non-resident foreign investors, there is a possibility that corporate tax or withholding tax will be levied on income sourced from Saudi Arabia. There is also a risk that platform transactions could be considered as establishing a permanent establishment, requiring careful handling.

VAT and RETT Classification Criteria Affect Investment Efficiency

The treatment of Value Added Tax (VAT) varies depending on whether the tokens are financial instruments or asset-backed. Platform fees, rent distributions, and sale proceeds are subject to distinct VAT treatments.

Revenue utility tokens may be exempt from VAT, while asset-backed tokens generally follow standard real estate VAT rules. Regarding Real Estate Transaction Tax (RETT), a 5% rate may apply, and whether the tokens are classified as listed securities will be a key factor in the determination.

Enhanced Transparency Accelerates Market Maturity

The investor community requires clear guidance from the tax authority (ZATCA) to avoid ambiguity in tax treatment. Accurate documentation of all transactions simplifies Zakat calculations and ensures proper compliance with financial authorities.

As Saudi Arabia expands its blockchain real estate market, a more transparent and liquid investment environment is being built. The development of an efficient management system for VAT, RETT, corporate tax rates, and the Zakat system is underway, ensuring the digital evolution of the real estate industry based on Vision 2030 continues steadily.