Costs & Taxes When Buying Property in Saudi Arabia as a Foreigner
A complete breakdown of all costs foreigners pay when buying property in Saudi Arabia — transaction tax, agent fees, legal costs, ongoing costs, and what you don't pay.
Summary: What You’ll Pay
| Cost | Amount | Who Pays |
|---|---|---|
| Real Estate Transaction Tax (RETT) | 5% of sale price (see KEC exception below) | Buyer |
| Agent commission | 2–2.5% | Typically split or buyer pays |
| Legal / lawyer fees | SAR 2,000 – 15,000 | Buyer |
| Notary / MoJ fees | SAR 100 – 500 (nominal) | Both parties |
| REGA approval fee (if applicable) | Varies | Buyer |
| Property valuation (if required) | SAR 1,000 – 3,000 | Buyer |
| Total typical transaction cost | 7–10% of purchase price | Buyer |
⚠️ Special Economic Zone Exception (KEC Medina): Knowledge Economic City operates under a special economic city framework. Buyers at KEC have reported a 10% RETT plus a 1% Economic City fee at handover — making total closing costs approximately 12–13%. Always verify the applicable rate directly with KEC and REGA before signing. See KEC guide →
The Real Estate Transaction Tax (RETT) — 5%
The RETT is the most significant cost. Introduced in 2020, it replaced a lower stamp duty. It applies to all real estate transactions, including those by foreigners.
- Rate: 5% of the agreed sale price
- Paid by: The buyer
- When: At the time of transfer registration
- Exemptions: First-time Saudi homebuyers have an exemption — this does not apply to foreign buyers
Example: On a SAR 1,000,000 property, RETT = SAR 50,000 (approximately USD 13,300)
Agent Commissions
Real estate agents in Saudi Arabia typically charge 2–2.5% commission. This is sometimes negotiable and may be split between buyer and seller or absorbed entirely by one party.
Licensed agents must be registered with REGA. Always verify an agent’s licence at rega.gov.sa.
Legal Fees
Not legally required but practically essential for non-Arabic speakers. Saudi real estate lawyers typically charge:
- SAR 3,000 – 8,000 for straightforward residential transactions
- SAR 8,000 – 15,000+ for complex purchases, off-plan, or large properties
- Fixed fees are common; ask for a quote upfront
What You Do NOT Pay
✅ No annual property tax — Ownership is not taxed annually ✅ No capital gains tax — Individuals pay nothing when they sell ✅ No VAT on residential — Buying or selling your home is VAT-free ✅ No inheritance tax — Though inheritance rules for non-Saudis are complex legally
Ongoing Costs After Purchase
| Cost | Typical Amount |
|---|---|
| Service/maintenance charges (if applicable) | SAR 5–25/sqm/year (varies by building) |
| Utilities (electricity, water) | Per usage — expats typically pay SAR 300–800/month |
| Home insurance | SAR 500 – 2,000/year (optional but advisable) |
Rental Income Tax
If you rent out your Saudi property, rental income is generally not subject to income tax for non-Saudi individual owners. However, this is an evolving area — verify with a Saudi accountant for your specific situation and nationality.
Currency Risk
If you’re buying in a currency other than SAR, note that the Saudi Riyal is pegged to the US Dollar at SAR 3.75 per USD. This peg has been maintained consistently since 1986 and eliminates USD/SAR exchange rate risk. Non-USD holders still carry their home currency vs. USD risk.
See Also
Frequently Asked Questions
Is there an annual property tax in Saudi Arabia? +
What is the Real Estate Transaction Tax (RETT)? +
Is there capital gains tax on property in Saudi Arabia? +
Does VAT apply to property purchases? +
Can I repatriate my money if I sell the property? +
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