Saudi Property Taxes and Fees in 2026: What a Foreign Buyer Actually Pays
The question every foreign buyer asks in Riyadh or Jeddah is the same one: on a SAR 5 million apartment, what actually leaves the account? The answer has moved twice in the past eighteen months. Once when the Real Estate Transaction Tax Law took effect in April 2025, and again on 23 June 2026, when the executive regulation for foreign ownership introduced a separate fee that applies to non-Saudis only.
Most of the cost breakdowns circulating online were written before the second change. They quote the 5% transaction tax and stop there. That is no longer the whole bill for a foreign buyer.
One structural point comes before any of it. A non-Saudi can only buy inside an approved zone, not anywhere in the city: nine zones in Riyadh, among them KAFD, Diriyah Gate, New Murabba, Qiddiya and King Salman Park, and 57 in Jeddah, including Jeddah Central. What follows is what a non-Saudi buyer in those zones pays around the price, which items are fixed in law, which are negotiable, and which are still genuinely unsettled. Where something is not resolved, we say so rather than round it off.
RETT is 5%, and the law goes after the seller
The Real Estate Transaction Tax is 5% of the transaction value, administered by ZATCA (source: ZATCA, PwC). It replaced the 15% VAT that used to apply to property sales, which is why nobody pays VAT on the apartment itself. Saudi and non-Saudi buyers are treated alike.
Two mechanics matter more than the rate. The tax falls due on the date of the transaction, meaning the date it is notarised, and the regulations may set an earlier payment date (source: EY). The party primarily liable is the transferor, meaning the seller, not you. Plenty of contracts push the cost onto the buyer anyway. That is allowed, but it only works if the contract says so in writing. If the contract is silent, do not assume you owe it, and do not assume the seller has paid it either. The buyer becomes jointly liable only where ZATCA can show the buyer caused the non-payment, which is narrower than being on the hook by default. It is not nothing, though, and it is reason enough to ask for evidence of payment rather than take it on trust.
One more thing before you agree to a declared value that is lower than the real one. ZATCA can recalculate the tax within three years of the transaction if the disclosed value sits below fair market value (source: EY). An under-declared price is not a saving. It is a liability that follows the asset into your ownership.
The 2% that most cost lists still miss
The Law of Real Estate Ownership by Non-Saudis authorises a real estate transaction fee of up to 5% of transaction value on transfers involving non-Saudis, and it sits on top of RETT rather than replacing it (source: King & Spalding). The executive regulation approved in June 2026 set the operative rate at 2%, collected by REGA. It applies to transfers involving non-Saudis inside the designated geographic zones in Riyadh, Jeddah, Makkah and Madinah, with no separate rate for residential as against commercial property (source: Greenberg Traurig, Asharq Al-Awsat).
Some disposals are rated at 0%: transfers made under a final court judgment, transfers arising from estate distribution, expropriation for public benefit, certain disposals by non-Saudi developers who build out within their licence period, and transfers from an individual into a Saudi company or fund that the individual wholly owns (source: Asharq Al-Awsat, Greenberg Traurig). A straightforward purchase of a finished or off-plan unit is not on that list.
Model 2%, and keep the statutory ceiling of 5% in view. The rate sits in a regulation, not in the law, which means it can be changed without new legislation. Payment has to run through approved electronic channels under the Saudi Central Bank payments law, so it is not an item the parties can settle informally between themselves (source: Asharq Al-Awsat).
VAT applies to the advice, not to the apartment
VAT at 15% does not apply to the property transfer in a standard sale. It does apply to everything built around the deal: brokerage, legal work, valuation, agency services. A 2.5% commission is therefore 2.875% of the price once VAT is added, and a quoted legal fee is not the number you will pay.
There is relief on a first home. The purchase is exempt from the 15% VAT up to SAR 1 million of value, and the state bears the RETT up to SAR 50,000. Both are for citizens (source: Ministry of Municipalities and Housing). Neither is available to a foreign buyer, and any adviser who implies otherwise is guessing.
Brokerage: 2.5% is the default, not a market convention
Under Article 14 of the Real Estate Brokerage Law, the commission on a sale is 2.5% of the transaction amount unless the parties agree otherwise in writing, and 2.5% of the first year’s rent on a lease (source: REGA). That is a statutory default that fills a gap in the contract. It is not a floor, and it is not a ceiling.
Article 7 of the same law is the one that protects you. The brokerage contract must be in writing, the broker must deposit a copy with REGA, and a contract that was never deposited is unenforceable. Brokers must also be REGA licensed. If someone claims a commission from you and cannot show a deposited contract, that claim has a problem.
Palmera charges the buyer 0%. The developer pays our side. We work in Riyadh and Jeddah only, and we say what we are paid and by whom before you look at a single floor plan.
The line by line
| Item | Rate | Who the law points at | Notes |
|---|---|---|---|
| RETT | 5% of transaction value | Seller (transferor) | Frequently shifted to the buyer by contract. Must be written. Due on the date of notarisation. |
| Non-Saudi transaction fee | 2% currently, law permits up to 5% | Charged on the disposal, collected by REGA | Applies inside the designated zones in Riyadh, Jeddah, Makkah and Madinah. Paid through approved electronic channels at registration. |
| Brokerage commission | 2.5% default unless agreed otherwise in writing | Per the brokerage contract | Palmera charges the buyer 0%. Check the contract is deposited with REGA. |
| VAT | 15% | On services, not on the property | Brokerage, legal, valuation. Not on the transfer itself. |
| Legal and due diligence | Quoted, not fixed | Buyer | Ask for a fixed fee in writing. Add VAT. |
| Valuation | Quoted | Buyer or lender | Add VAT. Relevant if you are financing. |
| Digital identity and document attestation | Quoted | Buyer | Non-residents obtain a digital identity through a Saudi embassy or representation before applying. |
Where the buyer carries the main items, 6% to 9% of the price is the honest working range. Look at the arithmetic behind it, though. RETT and the REGA fee alone come to 7% if both land on your side, so the range only holds if you are not also paying a full brokerage commission with VAT on top of them. Who pays what is not a closing detail. It is one of the larger negotiations in the whole transaction, and it happens before you sign, not after.
What you pay every year after that
Two annual levies exist. Only one of them is likely to touch an apartment buyer.
The white land fee applies to undeveloped land, at 2.5%, 5%, 7.5% or 10% of assessed value per year depending on the priority tier of the area, with a threshold of 5,000 square metres that can be met by aggregating the parcels one owner holds in the same taxed area (source: CMS). The 2026 cycle raised the top of that scale to 10%, and more than 60,000 landowners in Riyadh were billed under the revised rule. If you are buying land as a hold, this is not a rounding error. It is the whole investment case.
The amendments also extended the regime for the first time to long-vacant buildings, at an annual levy of up to 5% of equivalent rental value, which the Council of Ministers may raise to 10% on a recommendation from the ministerial committee (source: King & Spalding, Arab News). The definition targets buildings inside urban development boundaries that are left unused for a long period without legal justification. The implementing regulations for this part are still awaited (source: CMS), so nobody can tell you today exactly how it will be assessed on a single apartment held empty for resale. Anyone who does is inventing it. Watch for those regulations if your plan is to buy, hold vacant and flip.
Service charges are the third annual number, and they are contractual rather than statutory. Ask for the budget, the reserve fund policy and the escalation history before you commit. On a branded or hotel-linked asset, this line decides whether the net return is good or merely acceptable.
What is not settled, and what we will not guess
The law does not say who bears the 2% fee. The sources describe it as a charge on the disposal, collected by REGA at registration, without allocating it to one side the way the RETT law points at the transferor (source: King & Spalding). Treat it as negotiable and put the answer in the contract, including the rate applicable on the day of registration.
The rate itself is not locked. The law authorises up to 5% and the regulation currently sets 2%. If you are underwriting a resale in 2030, run the exit at both.
Which zones exist is not a closed question either. REGA has called the current map a starting point rather than a final document, and has given no timetable for adding to it (source: Enterprise KSA). Buy on what the map says today, not on a zone somebody expects to be added later.
How rental income is taxed in your hands depends on how you hold the asset, whether as an individual, through a Saudi company or through a fund. That answer is specific to your structure and your home jurisdiction. Get it from a Saudi tax adviser in writing before you sign, not from a brochure.
We will not tell you that a purchase produces a residency permit, or quote a threshold or a timeframe. Long-stay programmes exist and are being reshaped under Vision 2030, and their connection to a property purchase is not something we can state generically. Ask for it confirmed in writing for your case.
We also do not publish Saudi rental yields, price per square metre or price growth percentages. There is no verified dataset for those that we would put our name to, and a number invented for a sales deck is worse than no number.
Before you sign, get these into the contract
- Who pays RETT, stated in words, with evidence of payment produced at or before notarisation.
- Who pays the REGA non-Saudi fee, and at what rate on the registration date.
- The declared value, matching exactly what is filed with ZATCA, given the three year reassessment window.
- Commission: the amount, who pays it, and confirmation that the brokerage contract has been deposited with REGA under Article 7.
- For off-plan, the escrow arrangements under the Wafi programme, including the retention mechanics that stop withdrawals where defects are found, the five day window for the developer to start repairs, and REGA’s power to extend retention by six months or call the bank guarantee.
- The service charge budget, and any resale or rental restrictions attached to the unit.
Keep one number in view while you negotiate. On a purchase of SAR 5 million, RETT and the REGA fee together are SAR 350,000. Whether that sits on your side of the table or the seller’s is decided in a single clause, once, and never revisited.
