Saudi scraps 15% VAT levy for home buyers

Saudi scraps 15% VAT levy for home buyers

Government will also shoulder the cost of taxes for first-time home buyers of properties worth up to 1 million riyals

Saudi Arabia has added new incentives to keep its mortgage boom going by scrapping a 15 percent value-added tax on property sales and offering other relief for home buyers amid a push by the Arab world's largest economy to expand residential ownership.

Property transactions will instead be subject to a new five percent real estate sales tax, according to state-run news agency SPA. The government will also shoulder the cost of taxes for first-time home buyers of properties worth up to 1 million riyals ($267,000), according to a royal order published on Friday.

The threshold for the tax exemption was increased from 850,000 riyals previously for citizens buying their first homes.

Saudi Arabia's mortgage