New Regulations Announced on 6 July 2026

As part of the Kingdom’s efforts to regulate the real estate market and support sustainable urban development, the Saudi authorities introduced updated rules regarding foreign property ownership.

Under the new regulations:

• A 5% Real Estate Transaction Tax (RETT) applies to property transactions for both Saudis and non-Saudis throughout the Kingdom.
• An additional 2% fee applies to non-Saudis when disposing of or transferring ownership of properties located in:
  • Riyadh
  • Jeddah
  • Makkah
  • Madinah

These measures are implemented in accordance with the executive regulations governing foreign ownership of real estate in Saudi Arabia.

Foreign Property Ownership in Major Saudi Cities

The rules governing foreign ownership vary depending on the city due to economic, cultural, and religious considerations.

Makkah and Madinah

Because of their unique religious and historical significance, property ownership in Makkah and Madinah is subject to special regulations.

Foreign ownership in these cities:

• Is limited to Muslims.
• Is permitted only within designated areas.
• Must comply with specific legal and regulatory procedures.
• Is subject to the applicable taxes and fees established by Saudi regulations.

The restrictions are intended to preserve the sanctity and special status of these holy cities while ensuring an organized framework for property ownership.

Riyadh and Jeddah

As Saudi Arabia’s leading economic and commercial centers, Riyadh and Jeddah have specific regulations governing foreign ownership.

These rules aim to:

• Support urban development.
• Enhance quality of life.
• Direct investment into strategic areas.
• Promote sustainable growth in the real estate market.
• Maintain a balanced investment environment.

Compliance with these regulations ensures a transparent and secure ownership experience for foreign investors.

The Official Fees for Non-Saudis to Own Property in Saudi Arabia

Understanding The official fees for non-Saudis to own property in Saudi Arabia is essential before purchasing or transferring ownership of real estate in the Kingdom.

1. Real Estate Transaction Tax (5%)

Saudi Arabia imposes a 5% Real Estate Transaction Tax (RETT) on real estate transactions across all cities in the Kingdom.

This tax applies to:

• Saudi nationals.
• Non-Saudi individuals.
• Companies and legal entities.

The tax generally covers:

• Property sales.
• Ownership transfers.
• Certain types of gifts and transfers.
• Any transaction resulting in the transfer of property ownership.

This 5% tax is the standard fee applicable to property transactions throughout Saudi Arabia.

2. Additional 2% Fee for Non-Saudis

In addition to the 5% Real Estate Transaction Tax, an extra 2% fee applies to non-Saudis in specific cities.

The additional fee applies to properties located in:

• Riyadh
• Jeddah
• Makkah
• Madinah

As a result, non-Saudis may be subject to a total of:

• 5% Real Estate Transaction Tax
• 2% Additional Fee

This brings the total charges to 7% of the property transaction value in cases where the additional fee applies.

Example of the Applicable Fees

Suppose a non-Saudi purchases a property in Riyadh valued at SAR 2,000,000.

Type of Fee	Amount
Real Estate Transaction Tax (5%)	SAR 100,000
Additional Fee (2%)	SAR 40,000
Total Fees	SAR 140,000

This example demonstrates why understanding The official fees for non-Saudis to own property in Saudi Arabia is essential for proper financial planning.

Why Was the Additional Fee Introduced?

The additional 2% fee aims to achieve several objectives, including:

• Regulating ownership in major cities.
• Supporting sustainable urban development.
• Maintaining market stability.
• Directing investment into strategic sectors.
• Balancing foreign investment with local development priorities.

Does the Additional Fee Apply Across Saudi Arabia?

No.

The additional 2% fee only applies to non-Saudis dealing with properties located in:

• Riyadh
• Jeddah
• Makkah
• Madinah.

For properties located in other Saudi cities, only the standard 5% Real Estate Transaction Tax generally applies.

Benefits of Complying with Saudi Property Regulations

Following Saudi property ownership regulations provides several advantages:

• Legal certainty and protection.
• Clear understanding of financial obligations.
• Reduced risk of legal disputes.
• Smooth ownership and transfer procedures.
• Increased confidence in the Saudi real estate market.

Saudi Arabia’s regulatory framework is designed to create a secure and transparent environment for both local and foreign investors.

Legal Support for Foreign Property Ownership in Saudi Arabia

Foreign ownership of real estate in Saudi Arabia requires a thorough understanding of local laws, regulations, and applicable fees.

Professional legal assistance can help investors:

• Understand eligibility requirements.
• Review ownership restrictions.
• Calculate applicable taxes and fees.
• Conduct legal due diligence.
• Review sale and purchase agreements.
• Complete ownership transfer procedures.

Seeking legal guidance before purchasing property can help investors avoid costly mistakes and ensure full compliance with Saudi regulations.

Conclusion

The announcement made on 6 July 2026 (21 Muharram 1448 AH) introduced important updates regarding The official fees for non-Saudis to own property in Saudi Arabia.

While the 5% Real Estate Transaction Tax continues to apply to all property transactions across the Kingdom, non-Saudis dealing with properties in Riyadh, Jeddah, Makkah, and Madinah are also subject to an additional 2% fee, bringing the total charges to 7% in applicable cases.

Understanding these regulations and fees is essential for any foreign investor or expatriate considering purchasing property in Saudi Arabia, ensuring a secure, transparent, and legally compliant investment experience.

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