Property buying costs in Saudi Arabia go beyond the advertised sale price. For a standard taxable property transaction, the main official transaction tax is 5% Real Estate Transaction Tax (RETT). That equals SAR 50,000 on a SAR 1 million transaction, SAR 100,000 on SAR 2 million and SAR 200,000 on SAR 4 million, before any financing, valuation, professional or applicable registration-service costs.
Saudi Arabia’s current Real Estate Transaction Tax Law took effect on 10 April 2025 and sets RETT at 5% of real estate transactions. Understanding property buying costs in Saudi Arabia before choosing a property gives buyers a more realistic investment budget. The advertised price is only the starting point.
Property Buying Costs in Saudi Arabia at a Glance
Important: The 2% non-Saudi fee is not an additional 2% purchase tax. REGA’s implementing regulations apply it to specified dispositions of real estate rights by non-Saudis.
How Much Are Property Buying Costs in Saudi Arabia?
There is no single all-inclusive closing-cost percentage that applies to every buyer. For budgeting purposes, a practical starting point is:
Property price + applicable RETT amount + transaction-specific costs
The following examples assume the full transaction is taxable and that no exemption or relief applies:
- These figures are calculations based on ZATCA’s official 5% RETT rate.
RETT in Saudi Arabia: The 5% Transaction Tax
RETT stands for Real Estate Transaction Tax. ZATCA confirms that RETT is imposed at 5% on real estate transactions. The current law, issued under Royal Decree No. M/84, became effective on 10 April 2025.
For example:
- SAR 1 million transaction = SAR 50,000 RETT
- SAR 2 million transaction = SAR 100,000 RETT
- SAR 4 million transaction = SAR 200,000 RETT
Real estate transactions must also be registered through ZATCA’s RETT service before conveyance or documentation with the competent authorities. This makes RETT one of the most important property fees in Saudi Arabia to calculate before committing to a purchase.
Is Property Subject to VAT or RETT in Saudi Arabia?
Property buyers should distinguish RETT from VAT.
Real estate sale transactions fall under Saudi Arabia’s dedicated RETT framework rather than the standard 15% VAT treatment on the property sale itself, subject to the applicable RETT rules and exemptions. ZATCA originally introduced this treatment by exempting real estate supplies made by sale from 15% VAT and imposing 5% RETT instead.
Other real estate activities can have different VAT treatment. The distinction here specifically concerns property sale transactions. For buyers calculating property buying costs in Saudi Arabia, RETT is therefore the key transaction tax to check for a normal taxable purchase.
RETT Exemptions and First-Home Support
Not every transaction produces the same RETT burden.
One important government measure applies to eligible Saudi citizens purchasing their first home. ZATCA states that the state bears RETT on the first home up to SAR 1 million of the purchase value.
Where the support applies:
These are illustrative calculations based on the official 5% rate and SAR 1 million support threshold. Buyers should confirm eligibility before relying on the support.
Property Registration Costs in Saudi Arabia
RETT and property registration are separate.
Article 34 of Saudi Arabia’s Real Estate Registration Law states that first real estate registration is free of charge. The same provision allows fees for other real estate registration services under an approved schedule.
For budgeting purposes:
- First real estate registration: Free
- Other registration services: Fees may apply
- RETT: Separate 5% transaction tax where applicable
Buyers should therefore not interpret “free first registration” as meaning every registry-related service or every stage of ownership transfer is free.
Do Foreign Buyers Pay Additional Property Fees?
Foreign investors should distinguish purchase costs from future disposal costs. Under Saudi Arabia’s current non-Saudi ownership framework, REGA can charge a fee when a non-Saudi disposes of rights in rem over real estate. The current implementing regulations set that fee at 2% of the disposition value for specified cases in:
- Riyadh
- Jeddah
- Makkah
- Madinah
REGA also sets a 0% rate for dispositions outside the cases covered by Article 9, subject to the regulations.
The key point is:
This is not a blanket 2% tax charged simply because a foreign investor buys property.
- It is a fee relating to specified dispositions of real estate rights by non-Saudis, making it more relevant when considering potential exit or disposal costs.
Saudi Arabia’s current law also regulates where and how non-Saudis can own property, with different provisions depending on buyer type, location and geographical-zone rules.
Total Budget Examples: SAR 1m, SAR 2m and SAR 4m
A buyer should separate the advertised property price from the total transaction budget.
For budgeting purposes, these examples show the property price plus RETT and assume full taxability with no exemption.
RETT at 5%: SAR 50,000
RETT at 5%: SAR 100,000
RETT at 5%: SAR 200,000
These totals exclude transaction-specific expenses such as financing, valuation, professional assistance or paid registration services.
What Other Property Buying Costs Should Investors Consider?
Not every cost has a universal government-set percentage.
Depending on the transaction, buyers may also need to budget for financing or mortgage-related charges, valuation requirements, professional or legal services, paid Real Estate Registry services and other transaction-specific costs.
Because these expenses vary by lender, property, provider and transaction structure, applying one generic additional “closing-cost percentage” would be misleading.
A better approach is to calculate the applicable RETT first and then verify the remaining costs individually.
Property Buying Costs in Saudi Arabia: Quick Summary
The most predictable property buying cost in Saudi Arabia is RETT. For budgeting purposes, a fully taxable transaction at 5% means SAR 50,000 of RETT for every SAR 1 million of transaction value.
Frequently Asked Questions About Property Buying Costs in Saudi Arabia
What is RETT in Saudi Arabia?
RETT is Saudi Arabia’s Real Estate Transaction Tax. The current law imposes it at 5% on real estate transactions, subject to applicable rules and exemptions.
How much is RETT on a SAR 1 million property?
At 5%, RETT equals SAR 50,000 on a fully taxable SAR 1 million transaction.
Is first property registration free in Saudi Arabia?
Yes. Saudi Arabia’s Real Estate Registration Law states that first real estate registration is free of charge. Other registration services may carry approved fees.
Is a Saudi property sale subject to VAT or RETT?
Real estate supplies made by sale fall under the RETT framework rather than standard 15% VAT on the sale itself. For a taxable transaction, RETT is charged at 5%, subject to applicable rules and exemptions.
Do foreign buyers automatically pay an extra 2%?
No. The 2% REGA fee is not a blanket foreign-buyer purchase tax. It applies to specified dispositions of real estate rights by non-Saudis in Riyadh, Jeddah, Makkah and Madinah.
How much extra should I budget above the property price?
For a fully taxable transaction with no relief, RETT alone equals 5% of the transaction value. Financing, valuation, professional and applicable registration-service costs should then be checked separately.
