Saudi Arabia’s New Zakat Amendment (MR 1248): What Changed for Real Estate Developers in 2025

In June 2025, Saudi Arabia issued Ministerial Resolution No. 1248, amending Article 73 of the Executive Regulations for Zakat Collection (MR 1007). This update clarifies how off-plan real estate projects — those sold before construction completion — should be treated for Zakat purposes. It applies to fiscal years starting 1 January 2025.

Key Changes:

• New deduction formula: Zakat payers can now deduct off-plan project balances using a specific formula:
  Deduction = Closing balance – Additions during the year (if positive). EY
• Project-by-project approach: Each off-plan project must be assessed separately; mixed projects require non-current assets to be deducted first.
  KPMG
• Optional retrospective application: Businesses may request to apply this rule to previous fiscal years — if conditions set by ZATCA are met.
  EY Tax News
• Cap on deduction: The deduction cannot exceed the project’s opening balance in certain cases, diverging from the usual closing-balance rule.
  
  

Conclusion

Saudi Arabia updates Zakat rules again — MR 1248 changes how off-plan real estate projects are treated under MR 1007 starting 2025.

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