Property Taxes and Buying Costs in Saudi Arabia for Foreign Buyers

What taxes and fees apply when buying property in Saudi Arabia?

The contract price is only part of the budget. It helps to split costs into three groups: one-off charges at the transaction, recurring ownership costs, and tax on income if you rent the property out or sell it. In Riyadh, Jeddah, Makkah and Madinah, transactions involving non-Saudis also carry a separate fee that Saudi citizens do not pay; who bears it is not yet confirmed.

• RETT: a 5% transaction tax on the value, owed by the seller by default.
• REGA fee for non-Saudis: according to advisers, 2% in Riyadh, Jeddah Governorate, Makkah and Madinah, charged on top of RETT.
• Broker commission: 2.5% of the sale amount unless agreed otherwise in writing, paid by whoever signed the brokerage contract.
• VAT on the sale itself: none, since property sales became VAT-exempt on 4 October 2020.
• Registration with the Real Estate Registry: mandatory, because ownership does not exist without it.
• Ownership costs: service charges, utilities, furnishing, insurance and management.

RETT in Saudi Arabia: the 5% real estate transaction tax and who pays it

RETT is levied at 5% on each transaction separately, whatever the condition or use of the property, unless the transaction falls within the exemptions set by law. The tax base is the value agreed between the parties, provided it is not below fair market value on the transaction date. The current RETT Law was issued by Royal Decree M/84 of 19/03/1446H and has applied since 10 April 2025. Guidance is published by the tax authority, ZATCA.

By default the seller is liable for the tax; the buyer becomes jointly liable if they cause the tax to be unpaid, underpaid or paid late. The parties may agree in the contract who bears the cost in practice, but that agreement does not change who is legally liable. Before signing, confirm whether RETT is included in the price or added to it, and ask for proof of payment before the transfer is completed.

For off-plan sales the tax is due on or before notarisation of the transfer, so the deadline is tied to the title transfer rather than to the reservation. Build it into the payment schedule from the start.

The REGA fee for non-Saudi buyers in Riyadh, Jeddah, Makkah and Madinah

The Law of Real Estate Ownership and Investment by Non-Saudis took effect on 22 January 2026. It allows REGA to charge a fee of up to 5% of value on dispositions of real rights by non-Saudis. Article 9 imposes the fee "without prejudice to" fees and taxes prescribed by law, so it does not replace RETT.

According to advisers including Deloitte and Greenberg Traurig, the Implementing Regulations published in July 2026 set the actual rate at 2% for property in Riyadh, Makkah, Madinah and Jeddah Governorate, for all types of rights and uses. On the same reports, the rate is 0% outside those four cities and in specified cases such as inheritance, court rulings, waqf and a transfer to a wholly owned company.

Restrictions on buying matter more than any fee, and whether a non-Saudi can buy depends on the exact address. As a general rule, non-Saudis may own property within geographic zones designated by the Council of Ministers; for Riyadh, Jeddah, Makkah and Madinah these are set out in the Geographical Zones Document. For individuals there is one exception: a non-Saudi legally residing in the Kingdom may own one home outside the zones, but not in Makkah or Madinah. A non-resident gets no such right.

A 0% fee outside the four cities does not mean that any property there is open to non-Saudis. Check the status of the exact address, including in Al Khobar, on the Saudi Properties portal rather than going by the city name. In Makkah and Madinah an individual non-Saudi may own property only if they are Muslim.

Is there VAT on property in Saudi Arabia?

Since 4 October 2020, sales of all real estate in Saudi Arabia, including new-build homes, commercial property and land, have been exempt from VAT under Royal Order A/84. RETT at 5% applies instead.

Leasing works differently. Residential leases are VAT-exempt, while commercial leases are subject to VAT at 15%. Factor that in if you are looking at a shop or an office.

The exemption covers the property sale itself. The VAT treatment of related services, such as brokerage, property management or furniture, is outside the scope of this guide, so check each invoice and contract rather than assuming there is no VAT at all.

Broker commission, registration and payment logistics

Under the Real Estate Brokerage Law, brokerage and real estate services in Saudi Arabia require a REGA licence. Unless the parties agree otherwise in writing, the commission is 2.5% of the sale amount, or 2.5% of the first year's rent for a lease, and it is paid by the party that signed the brokerage contract. The contract must be in writing and a copy deposited with REGA.

If you buy directly from a developer without an intermediary, this cost may not arise at all. If the broker works under a contract with the seller, the seller pays by default. Rely on the written contract, not on verbal assurances.

A non-Saudi's ownership exists only once it is registered with the Real Estate Registry; a reservation, a signed contract or a payment does not replace registration. A non-resident first obtains a digital identity through a Saudi mission abroad and, according to advisers (Deloitte, Greenberg Traurig), also needs a Saudi bank account and a Saudi mobile number, with payments made only electronically through SAMA payment systems.

This guide does not quote registration or notarisation charges. Ask the developer or your lawyer for a full list of fees for the specific property, and allow for bank charges and currency conversion at your bank's rates.

Worked example: what a purchase costs on top of the price

This is a hypothetical example, not an offer or a quote for any property. Assume a non-Saudi buys an apartment in a designated zone in Jeddah for SAR 1,000,000, hires a broker on their own side and agrees in the contract to bear every payment listed. Of the items listed, this case puts the most on the buyer.

1. Price: SAR 1,000,000.
2. RETT at 5%: SAR 50,000. The seller is liable by law; it lands in the buyer's budget only if the contract shifts it to the buyer.
3. REGA fee at 2% (Jeddah, rate as reported by advisers): SAR 20,000, if the fee applies and falls on the buyer.
4. Broker commission at 2.5%: SAR 25,000, if the buyer hired the broker and no other rate was agreed in writing.
5. Total: SAR 1,095,000, or 9.5% above the price, before bank charges, registration fees, furnishing and running costs.

If RETT stays with the seller and you buy from the developer without a broker, the only item left from this list is the 2% REGA fee of SAR 20,000, if it falls on the buyer. The outcome depends on the contract, so rerun the figures for your own transaction.

Running costs to budget for after the purchase

Recurring costs start once the property is registered. There are no reliable averages for specific projects, so we list the items and recommend getting the amounts in writing from the developer or the management company.

• Service charges for common areas, security and community facilities, as set out in the project documents.
• Utilities: electricity, water, cooling and internet.
• Fit-out, furniture and preparation for letting if the unit is handed over unfurnished.
• Property insurance.
• Letting management if you live outside Saudi Arabia, plus a broker's commission if you let through one: 2.5% of the first year's rent by default.
• Bank account fees and currency conversion.

For off-plan purchases the payment schedule matters too. Under the implementing regulations of the off-plan sale law, a reservation during the marketing licence stage is capped at 5% of the unit's value, and all buyer payments go into the project's escrow account supervised by REGA through Wafi. Escrow controls how the money is used, but it is not an unconditional guarantee of completion.

Is rental income or a resale gain taxed in Saudi Arabia?

According to PwC Worldwide Tax Summaries, an individual's employment income earned in Saudi Arabia is not subject to income tax. According to the same source, non-employment income is treated differently: it is taxed as the income of a business or permanent establishment, and non-residents' Saudi-source income falls under withholding tax rules.

How these rules apply to a foreign individual's rental income has not been officially confirmed. So do not build your numbers on an untested assumption about tax on rent; take the question to a tax adviser before buying, including how you plan to let the property. Rental income is possible but never guaranteed: it depends on the market, occupancy and costs, and the owner carries the risk.

On resale, RETT at 5% applies again to the transaction value, and by default the seller, now you, pays it. Whether a foreign individual's gain on sale is taxed in Saudi Arabia also needs to be checked with an adviser. Your country of tax residence may tax rental income and gains, so include it in the same conversation.

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