Property costs
& taxes in Saudi Arabia
what buyers really pay
A transparent breakdown of every cost, tax and fee for buying property in Saudi Arabia. Built for international investors who need clarity before committing.
Understanding the full picture
What does it really cost to buy property in Saudi Arabia?
Saudi Arabia offers one of the most tax-efficient property markets globally. With no annual property tax, no capital gains tax for individuals, and a straightforward 5% transaction tax, the Kingdom provides clarity that many international markets lack. This guide breaks down every cost you'll encounter.
Key facts for buyers
Saudi Arabia's property cost structure at a glance
Before diving into details, here's what makes Saudi Arabia's property market cost-competitive compared to other global investment destinations.
Cost advantages
No annual property tax on residential or commercial real estate
No capital gains tax for individual property sales
5% Real Estate Transaction Tax (RETT) replaced 15% VAT in 2020
VAT-exempt first residential property purchases under SAR 1M
No stamp duty or inheritance tax on property
Key considerations
RETT (5%) applies to all property transactions
15% VAT applies to commercial property transactions
Foreign buyers require MISA approval (processing fees apply)
Makkah and Madinah restricted to Saudi/GCC nationals
Legal and registration fees add 1-3% to transaction costs
Important legal notice
This guide provides general information based on Saudi Arabian regulations as of 2025. Tax laws and property regulations can change. We strongly recommend consulting with qualified legal and tax professionals before making any property purchase decisions. This content does not constitute legal or financial advice.
In this guide
What we cover
One-time transaction costs
Costs when buying property in Saudi Arabia
These are the fees and costs you'll pay once, at the time of purchase. Understanding these upfront helps you budget accurately and avoid surprises.
Real Estate Transaction Tax (RETT)
The primary government tax on all property transactions in Saudi Arabia. Introduced in October 2020, replacing the previous 15% VAT on real estate.
Calculated on the agreed sale price or market value (whichever is higher)
Payable by the buyer at time of transaction
Must be paid before ownership transfer is registered
Applies to both new and resale properties
Property Registration Fee
Fee charged by the Ministry of Justice for registering the property deed (Sakk) in the buyer's name.
Minimum fee of SAR 500 applies
Covers title deed transfer and registration
Processing typically takes 1-3 business days
Additional charges may apply for expedited service
Legal & Conveyancing Fees
Professional fees for legal review, contract preparation, due diligence and conveyancing services.
Recommended for all international buyers
Covers contract review and negotiation
Includes title verification and due diligence
Some developers include legal support in purchase
Agent Commission
Real estate agent commission, typically paid by the seller but sometimes shared or negotiated.
Standard rate is 2.5% of sale price
Often paid by the seller in Saudi Arabia
For off-plan, usually included in developer pricing
Always clarify commission arrangements upfront
Valuation Fee
Independent property valuation required for mortgage applications and some transactions.
Required for bank financing
Must be from TAQEEM-accredited valuer
Valid for 3-6 months typically
Cost varies by property size and type
Bank & Mortgage Fees
Fees associated with mortgage arrangement, including bank processing and early settlement charges.
Arrangement fee typically 1% of loan amount
Life insurance (Takaful) often required
Property insurance mandatory for mortgaged properties
Early repayment fees may apply (typically 3 months' profit)
Total one-time costs summary
When budgeting for your property purchase, plan for total transaction costs between 7-10% of the property value, depending on whether you're using a mortgage and the level of legal support required.
Minimum estimate
~6.5%
Cash buyer, no agent
Typical range
7-9%
Standard transaction
With mortgage
8-10%
Including bank fees
Tax obligations
Property taxes in Saudi Arabia explained
Saudi Arabia offers one of the most tax-friendly property environments globally. Here's what you need to know about each tax type and how it applies to property.
Key tax advantage: No annual property tax
Unlike many countries, Saudi Arabia does not levy any annual property tax (equivalent to council tax, rates, or property tax in other jurisdictions). You own your property without ongoing government taxation on the asset itself.
Annual Property Tax
Saudi Arabia does not impose annual property taxes on residential or commercial real estate.
No equivalent to US property tax or UK council tax
No recurring government levy on property ownership
Applies to all property types and nationalities
One of the key attractions for international investors
Capital Gains Tax
Individual property sellers are not subject to capital gains tax. Corporate entities may have different treatment.
No capital gains tax for individual sellers
Corporate entities subject to standard corporate tax
Real estate investment trusts (REITs) have specific rules
Consult tax advisor for corporate structures
Value Added Tax (VAT)
VAT treatment depends on property type. Residential is generally exempt, commercial attracts 15% VAT.
Residential first sale by developer: 0% if under SAR 1M
Commercial property sales: 15% VAT applies
Residential resales: Generally VAT-exempt
RETT replaces VAT for most residential transactions
Inheritance & Gift Tax
Saudi Arabia does not levy inheritance tax or gift tax on property transfers within families.
Property can be transferred to heirs without tax
No gift tax on property transfers
Islamic inheritance rules (Faraid) apply by default
Wills can be registered for non-Muslim owners
Tax regulations can change
This information reflects current Saudi tax law as of 2025. Tax regulations can be updated, and individual circumstances vary. We strongly recommend consulting with a qualified tax advisor familiar with Saudi regulations before making investment decisions.
International buyer requirements
Additional costs and requirements for foreign buyers
Non-Saudi nationals can purchase property in the Kingdom, but there are additional requirements and associated costs to consider. Here's what international investors need to know.
Who can buy property in Saudi Arabia?
Saudi Arabia welcomes foreign property investment under specific conditions established by the Ministry of Investment (MISA) and Real Estate General Authority (REGA).
Saudi nationals: Full ownership rights nationwide
GCC nationals: Can own property similar to Saudi citizens
Non-GCC residents: Can purchase with valid Iqama (residence permit)
Non-resident foreigners: Require MISA approval for each purchase
Companies: Must be Saudi-registered or have licensed branch
Full freehold ownership
Foreigners receive full ownership rights
Once approved, foreign buyers receive the same freehold ownership (Sakk) as Saudi nationals, including the right to sell, lease, and transfer property to heirs.
MISA Approval Process
Non-residents must obtain approval from the Ministry of Investment before purchasing property.
Application processing fee
Document authentication and translation
Processing time: 2-4 weeks typically
Valid passport and proof of funds required
Legal Representation
Recommended for international buyers to navigate local requirements and ensure compliant transactions.
Contract review and negotiation
MISA application support
Power of attorney arrangements
Liaison with notary public
Document Authentication
Foreign documents must be authenticated and translated for use in Saudi Arabia.
Passport certification
Bank reference authentication
Translation to Arabic (certified)
Embassy/consulate legalization if required
Power of Attorney
Often needed if the buyer cannot be present for all transaction stages.
Notarized at Saudi embassy/consulate abroad
Or arranged through local notary if in Kingdom
Specific to property transaction
Valid for specified period
Geographic restrictions for foreign ownership
Certain areas in Saudi Arabia have restrictions on foreign property ownership that buyers must be aware of:
Makkah and Madinah: Restricted to Saudi and GCC nationals only
Border regions: May have additional security restrictions
Military zones: Not available for foreign ownership
Most major cities: Open to foreign investment with approval
Need guidance on foreign ownership?
Our team specializes in helping international buyers navigate the Saudi property market. We can guide you through the MISA approval process and connect you with trusted legal partners.
Annual ownership costs
Ongoing costs of property ownership
While Saudi Arabia has no annual property tax, there are still regular costs to budget for as a property owner. These vary significantly by property type, size and location.
SAR 30-100/sqm
Per year
Service Charges
Fees charged by building management for common area maintenance, security, and shared facilities.
Apartments and compounds have mandatory service charges
Covers cleaning, security, landscaping, pool maintenance
Luxury developments typically at higher end of range
Usually paid quarterly or annually in advance
SAR 500-3,000
Per month
Utilities
Electricity, water and (where applicable) district cooling costs.
Electricity: SAR 0.18-0.30/kWh (tiered rates)
Water: SAR 0.10-6/m³ (tiered rates)
District cooling in some developments
Summer months significantly higher for A/C
0.1-0.3%
Of value/year
Property Insurance
Recommended building and contents insurance to protect your investment.
Mandatory for mortgaged properties
Covers fire, flooding, structural damage
Contents insurance optional but recommended
Multiple providers available
1-2%
Of value/year
Maintenance Reserve
Budget allocation for repairs, replacements, and general upkeep.
A/C servicing (essential in Saudi climate)
Painting and minor repairs
Appliance replacement
Recommended to budget conservatively
5-10%
Of rent (if let)
Property Management
For investment properties: fees for tenant management, rent collection, and property oversight.
Finding and vetting tenants
Rent collection and accounting
Maintenance coordination
Legal compliance and renewals
SAR 500-5,000
Per year
Community Fees
Additional fees for gated communities, club memberships, or premium facilities.
Gated community access and security
Golf club or beach club memberships
Premium gym or spa facilities
Not applicable to all properties
Annual budget guidelines by property type
Use these estimates as starting points when calculating your ownership costs. Actual costs vary by specific property, location and usage.
1-2 bed apartment
SAR 15,000-40,000/year
Including utilities and service charges
3-4 bed villa
SAR 40,000-100,000/year
Including utilities and maintenance
Luxury property
SAR 100,000+/year
Premium services and facilities
For investment property owners
If you're purchasing property as an investment, factor these ongoing costs into your yield calculations. A property with high service charges or management fees will reduce your net rental return.
Calculate net yield after all ongoing costs
Budget 5-10% vacancy allowance per year
Property management essential for overseas owners
Factor in periodic refurbishment costs between tenancies
Interactive tool
Property cost calculator
Estimate your total costs for buying property in Saudi Arabia. Adjust the values below to see a personalized breakdown of transaction and ongoing costs.
Your property details
One-Time Transaction Costs
Real Estate Transaction Tax
5% of property value
SAR 100,000
Registration Fee
0.25%
SAR 5,000
Legal Fees (estimated)
1.5%
SAR 30,000
Foreigner Approval Fees
MISA and documentation
SAR 3,000
Agent Commission
2.5% (if buyer pays)
SAR 50,000
Total One-Time Costs
6.9% of property value
SAR 138,000
Estimated Annual Costs
Maintenance & Repairs
~1% of property value
SAR 20,000
Property Insurance
~0.2% of property value
SAR 4,000
Utilities (estimated)
varies by usage
SAR 15,000
Total Annual Estimate
SAR 39,000
These calculations are estimates only and based on typical rates. Actual costs may vary based on specific property, location, and negotiated terms. Consult with professionals for accurate figures before purchase.
Frequently asked questions
Common questions about property costs in Saudi Arabia
Answers to the questions we hear most often from international buyers about costs, taxes and fees.
The Real Estate Transaction Tax (RETT) is a 5% tax on property transactions in Saudi Arabia. It was introduced in October 2020 to replace the previous 15% VAT on real estate, making property purchases significantly more affordable.
RETT is calculated based on the agreed sale price or the property's market value, whichever is higher. The tax must be paid before the ownership transfer can be registered with the Ministry of Justice.
- Rate: 5% of property value
- Paid by: The buyer
- Timing: Before title transfer
- Applies to: All property types
No, Saudi Arabia does not levy any annual property tax on residential or commercial real estate. This is one of the significant advantages of property ownership in the Kingdom compared to many other countries.
Unlike the UK (council tax), USA (property tax), or many European countries, you will not pay any recurring government tax simply for owning property in Saudi Arabia.
For individual property owners, there is no capital gains tax when selling property in Saudi Arabia. This makes the Kingdom particularly attractive for property investors seeking tax-efficient returns.
However, corporate entities and real estate investment structures may have different tax treatment. If you're purchasing through a company structure, consult a tax advisor for specific guidance.
VAT treatment of property in Saudi Arabia is nuanced. The introduction of RETT was specifically designed to reduce VAT burden on residential property buyers.
- Residential first sale (new): RETT applies, not VAT
- Residential resale: RETT applies, not VAT
- Commercial property: 15% VAT applies in addition to RETT
- First home under SAR 1M: May qualify for VAT relief
Foreign buyers (non-Saudi, non-GCC nationals) face some additional costs related to the approval and documentation process:
While these add to the overall cost, they are one-time expenses. Once you own the property, ongoing costs are the same as for any owner.
- MISA approval processing: SAR 2,000-5,000
- Document authentication and translation: SAR 1,000-3,000
- Legal representation (recommended): SAR 5,000-15,000
- Power of attorney (if needed): SAR 500-2,000
For most buyers, total transaction costs range from 7-10% of the property value. This breaks down approximately as:
- RETT: 5%
- Registration: 0.25%
- Legal fees: 1-2%
- Agent commission: 0-2.5% (depends on arrangement)
- Foreigner costs: 0.5-1% (if applicable)
Different costs are paid at different stages of the transaction:
- Reservation fee (refundable): Paid to developer/agent at reservation
- Legal fees: Typically 50% upfront, 50% on completion
- RETT: Paid to ZATCA before ownership transfer
- Registration fee: Paid at Ministry of Justice
- Agent commission: Usually on completion
- Balance of purchase: To seller/developer on completion
Have a specific question about costs or taxes? Our team is available to provide personalized guidance based on your situation. Contact us for a confidential discussion about your property investment plans.
Related resources
Continue your research
Explore our comprehensive guides to make informed property decisions in Saudi Arabia.
Buying guide
Complete Guide to Buying Property in Saudi Arabia
Step-by-step process from search to ownership for international buyers.
Residency
Visa & Residency Guide for Property Buyers
How property investment connects to Saudi residency options.
Vision 2030
Vision 2030 Investment Opportunities
Understanding the mega-projects driving property demand.
Market insights
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Analysis, trends and forecasts for Saudi property investors.
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