Saudi Arabia's real estate digitization advances, tokenized investments enter a new phase under Vision 2030

The Democratization of Real Estate Investment Enabled by Blockchain Technology

In line with Saudi Arabia’s Vision 2030 initiative, the real estate sector is undergoing innovative changes. Through the tokenization of real estate using blockchain, high-value properties that were previously accessible only to large investors are now opening their doors to the general investing public.

By dividing property ownership into digital tokens, investment barriers are significantly lowered. Multiple investors can share ownership of a single property, creating a truly inclusive investment environment. The Registration Bureau under the Real Estate General Authority has already completed the development of a blockchain registration system, an asset subdivision mechanism, and marketplace integration, enabling digital transfer of ownership and dramatically increasing transaction speed and transparency.

Understanding Complex Tax Rules within the Framework of Vision 2030

With the advent of tokenized real estate investments, it becomes crucial to adapt to Saudi Arabia’s unique tax system. The taxation method varies depending on how tokens are classified, which greatly influences investor decisions.

Transaction-purpose tokens are taxed based on their market value, while income-focused tokens are taxed on interest and dividends. Additionally, the determination of zakat (Islamic charitable giving) applicability also depends on the nature of the tokens. As part of the efforts to improve the investment environment under Vision 2030, these rules are being clarified gradually, but investors need to conduct thorough prior checks.

For foreign investors, it is also necessary to consider the potential applicability of corporate tax or withholding tax on Saudi-sourced income. VAT (Value Added Tax) processing is complex as well, with different treatments depending on whether tokens are financial instruments or asset-backed. Real Estate Transaction Tax (RETT) may typically be applied at a rate of 5%.

Enhanced Transparency Reinforces Investor Confidence

Alongside the promotion of Vision 2030, Saudi Arabia is rapidly advancing the institutional framework for the real estate tokenization market. The transparency of blockchain records and the audit trail ensure clear reporting to tax authorities such as ZATCA. By accurately recording all transactions, investors can simplify zakat calculations and facilitate compliance with Ministry of Finance regulations.

This movement is helping Saudi Arabia establish itself as a high-liquidity, highly transparent investment platform. The environment for more efficient management of VAT, RETT, and tax rate systems will foster long-term trust among investors. The digital innovation in the real estate industry is already in the implementation stage, steadily advancing the achievement of Vision 2030 goals.