Property Purchase Simulator – Saudi Arabia

Q: Can a foreigner buy property in Saudi Arabia?

Yes, under certain conditions. Foreign residents (valid iqama holders) can purchase property for personal use with approval from the Ministry of Interior. Premium Residency holders have more flexibility. Non-residents can invest in certain special economic zones and mega-projects. Purchases in Mecca are reserved for Saudi citizens and GCC nationals, but long-term leases (99 years) are available for foreigners.

Q: Can RETT be exempted?

Yes, certain exemptions exist. The Sakani program offers RETT exemption for a Saudi citizen's first home, up to 1 million SAR. Beyond that, the 5% RETT applies on the excess amount. Donations between first and second-degree relatives also benefit from exemptions. Real estate transactions related to inheritance and transfers in case of divorce are also exempt under certain conditions. Check your eligibility through the Sakani portal.

Q: How does Islamic property financing work?

Property financing in Saudi Arabia follows Islamic finance principles. The most common structure is Murabaha: the bank buys the property then resells it to the borrower with a profit margin (equivalent to an interest rate). Ijara (lease-to-own) is also popular. Effective rates are comparable to conventional rates, generally between 4% and 7%. Monthly repayments are fixed throughout the contract. The property serves as collateral and remains in the bank's name until full repayment.

Q: What is the Ejar rental program?

Ejar (إيجار) is the Ministry of Housing's electronic platform for registering and managing rental contracts in Saudi Arabia. Since 2018, Ejar registration has been mandatory for all rental contracts. The platform protects landlord and tenant rights, facilitates rent collection and serves as an official reference in disputes. For landlords, Ejar registration is necessary to enforce legal rights. The platform also offers digital brokerage services.

Q: What annual charges does a Saudi owner pay?

After purchasing in Saudi Arabia, recurring costs include: mortgage payments, service charges (for apartments, typically 50-200 SAR/m2/year), home insurance (not mandatory but recommended), maintenance costs (budget 1-2% of property value per year), and utility bills (electricity, water via SEC and NWC). There is no annual property tax in Saudi Arabia. If you rent out the property, rental income is not subject to personal income tax.

Calculate RETT, total acquisition cost and your monthly mortgage payment for buying property in Saudi Arabia, whether resale or new build (Wafi off-plan).

Your project resale (existing)

Rates 2026

Property priceSAR 1,000,000

Down paymentSAR 200,000 (20%)

Additional agency feesNo additional fees

Loan duration25 years (300 months)

Interest rate5.5 %

Insurance0.34 %

Total monthly payment

SAR 5,682.21

≈ 1k €

incl. SAR 250.61 insurance

RETT + fees

SAR 84,500.00

≈ 21k €

8.5% of price – Resale (Existing)

Credit cost

SAR 820,163.66

≈ 205k €

interest + insurance

Total cost

SAR 1,904,663.66

≈ 476k €

price + fees + credit

Acquisition summary

Acquisition cost

Property priceSAR 1,000,000.00

RETT + feesSAR 84,500.00

Total acquisition costSAR 1,084,500.00≈ 271k €

Financing

Down paymentSAR 200,000.00

Amount borrowedSAR 884,500.00

Credit interestSAR 744,981.16

Total insuranceSAR 75,182.50

All-inclusive total costSAR 1,904,663.66≈ 476k €

Key indicators

Fees / Price

8.5%

Down payment / Price

20.0%

Loan / Price

88%

Total surcharge

SAR 904,663.66

Chart analysis

Breakdown of the total cost of your real estate project in Saudi Arabia: price, fees and credit.

SAR 1.9M

total cost

Property price (SAR 1.0M)

RETT + fees (SAR 85k)

Credit interest (SAR 745k)

Insurance (SAR 75k)

Detailed transaction fees

Resale (Existing)

For a resale (existing) purchase in Saudi Arabia, Real estate transaction tax – replaced VAT on property since 2020

Item	Rate / Type	Amount
RETT (Real Estate Transaction Tax) Real estate transaction tax – replaced VAT on property since 2020	5%	SAR 50,000.00
Agent commission Standard commission for licensed real estate agent	2,5%	SAR 25,000.00
Evaluation fee Property appraisal by a bank-approved expert	flat fee	SAR 5,000.00
Administrative fees Filing, registration and various formalities	flat fee	SAR 2,000.00
Mortgage registration Mortgage registration fee	0,25%	SAR 2,500.00
Total transaction fees	8.45%	SAR 84,500.00

Amortization schedule

Year-by-year repayment breakdown

25 years

Year	Principal repaid	Interest paid	Total paid	Remaining balance
1 Year 1	SAR 16,954.92	SAR 48,224.33	SAR 65,179.25	SAR 867,545.08
2 Year 2	SAR 17,911.31	SAR 47,267.94	SAR 65,179.25	SAR 849,633.78
3 Year 3	SAR 18,921.65	SAR 46,257.60	SAR 65,179.25	SAR 830,712.13
4 Year 4	SAR 19,988.98	SAR 45,190.27	SAR 65,179.25	SAR 810,723.15
5 Year 5	SAR 21,116.51	SAR 44,062.74	SAR 65,179.25	SAR 789,606.64

Wafi (New build) vs Resale Comparison

Impact of property type on transaction fees for a price of SAR 1.0M.

Resale (Existing)

SAR 84,500.00

8.45% of price

New build (Wafi)

SAR 82,500.00

8.25% of price

New build savings

SAR 2,000.00

2% savings

The asking price is not what a purchase in Saudi Arabia actually costs: on a property of SAR 1,000,000.00, acquisition costs come to SAR 84,500.00, or 8.5 % of the price. They break down into RETT, Agent commission, Evaluation fee. These are paid in cash on top of the deposit and cannot be borrowed, which is the usual surprise for a first-time buyer and often runs into tens of thousands. On the financing side, at a rate of 5.50 %, borrowing over 25 years after a deposit of SAR 200,000.00 gives a monthly payment of SAR 5,682.21 including insurance. The calculator below recalculates all of it on your own price, deposit and term, and the table breaks out every fee line by line, because that is where most of the difference between one country and another sits, far more than in the interest rate itself.

Everything you need to know about buying property in Saudi Arabia

Buying property in Saudi Arabia involves specific fees: the 5% RETT (Real Estate Transaction Tax), agent commission and appraisal fees. Understanding these fees helps you better prepare your budget, in the context of Vision 2030 which is transforming the Saudi real estate market.

RETT: the Saudi real estate transaction tax

The RETT (Real Estate Transaction Tax), in Arabic ضريبة التصرفات العقارية, is the main tax applicable to real estate transactions in Saudi Arabia. Introduced in October 2020 to replace the 15% VAT on property, it amounts to 5% of the sale price. RETT is owed by the seller but is often passed on to the buyer during negotiation. It applies to all real estate transactions: sales, donations, exchanges, and even long-term leases exceeding 50 years. Registration and payment are done through the Zatca platform (formerly GAZT).

Sakani Program: Saudi housing assistance

The Sakani (سكني) program is the flagship initiative of the Saudi Ministry of Housing to facilitate homeownership. It offers several advantages: RETT exemption for the first home (up to 1 million SAR), profit subsidies (the government covers part of the loan interest), and access to subsidized housing projects. Eligible Saudi citizens can benefit from subsidized property financing at reduced rates. Registration is done through the Sakani portal and mobile app. The program has helped hundreds of thousands of Saudi families access homeownership.

REDF: the Real Estate Development Fund

The REDF (Real Estate Development Fund / صندوق التنمية العقارية) is the Saudi government body that finances and subsidizes access to housing. REDF offers subsidized loans covering up to 500,000 SAR without profit (interest-free). Beneficiaries are selected based on income, family status and waiting list seniority. REDF works in partnership with commercial banks and property financing companies to offer solutions combining subsidized and commercial financing. The program covers purchase, construction and even self-build.

Vision 2030 and its impact on real estate

Vision 2030 by Crown Prince Mohammed bin Salman has profoundly transformed Saudi real estate. The goal is to raise the homeownership rate to 70% by 2030 (from 47% in 2016). Mega-projects like NEOM, The Line, Jeddah Tower, and the Red Sea Project attract massive investments. Regulatory reform includes the creation of the General Authority for Real Estate (REGA), rental market regulation via Ejar, and gradual opening to foreign investors. The Riyadh real estate market is experiencing exceptional growth, driven by the influx of businesses and residents.

Foreign ownership in Saudi Arabia

Historically restrictive, legislation on foreign ownership in Saudi Arabia is evolving rapidly. Foreign residents (iqama holders) can purchase property for personal use with approval from the Ministry of Interior. Non-residents can invest in certain special economic zones and mega-projects (NEOM, Red Sea, etc.). The Premium Residency scheme allows holders to purchase residential and commercial properties. Restrictions are gradually easing under Vision 2030 to attract foreign investment.

Wafi: regulation of off-plan sales

Wafi (وافي) is the off-plan sales regulation program in Saudi Arabia, managed by the Ministry of Housing. It ensures that off-plan real estate projects are properly registered and monitored. Developers must obtain a Wafi license and deposit buyer funds in escrow accounts. The program protects buyers against delivery delays and developer defaults. It enforces construction quality standards and delivery timelines. Registration on the Wafi portal is mandatory for any off-plan sales project.

Sharia-compliant property financing

In Saudi Arabia, the vast majority of property financing is Sharia-compliant (Islamic finance). The main structures used are Murabaha (cost-plus sale: the bank buys the property and resells it to the borrower with a profit margin), Ijara (lease-to-own) and Musharaka Mutanaqisa (diminishing partnership). Rates are expressed as profit margins rather than "interest", but the effective cost is comparable. Banks like Al Rajhi, SNB and Riyad Bank offer financing up to 25 years with a minimum down payment of 10 to 30%.

Real estate market: Riyadh, Jeddah and key cities

The Saudi real estate market is dominated by Riyadh, the capital, which is experiencing explosive growth due to the influx of corporate headquarters (HQ program) and demographic expansion. Average prices in Riyadh range from 4,000 to 8,000 SAR/m2 depending on the district. Jeddah, gateway to Mecca, offers slightly lower prices with a dynamic market around the waterfront and the Jeddah Tower project. Mecca and Medina have a specific market linked to religious tourism. New cities like NEOM and King Abdullah Economic City (KAEC) represent new long-term investment opportunities.

Summary table of Saudi transaction fees

Detailed comparison of each fee component between resale and Wafi (new build) purchases in Saudi Arabia.

Component	Resale (Existing)	New build (Wafi)	Detail
RETT	5%	5%	Real Estate Transaction Tax (ضريبة التصرفات العقارية)
Agent commission	2.5%	2.5%	Licensed real estate agent commission
Evaluation fee	~5,000 SAR	~3,000 SAR	Property appraisal by approved expert
Administrative fees	~2,000 SAR	~2,000 SAR	Filing, registration and formalities
Mortgage registration	0.25%	0.25%	Mortgage registration
Estimated total	~7-8%	~7-8%	Percentage of property price

Key steps for buying property in Saudi Arabia

Pre-approval and property search

Obtain financing pre-approval from a Saudi bank (Al Rajhi, SNB, Riyad Bank, etc.) or from REDF if eligible. Search for properties on platforms like Aqar.fm or Bayut.sa. Verify the authenticity of the title deed (صك ملكية) and that the property is free of encumbrances. For off-plan purchases, verify the developer's Wafi license.

Negotiation and sale agreement

Negotiate price and terms. Sign a preliminary sale agreement and pay a deposit (typically 5-10% of the price). The bank conducts the property appraisal and finalizes the financing offer. Declare and pay the 5% RETT through the Zatca platform. Obtain the RETT payment certificate, required for property transfer.

Property transfer

Property transfer is done through the public notary (كاتب العدل) or via the Nafath digital platform. Both parties sign the final sale deed. The title deed (صك ملكية) is updated in the buyer's name in the Ministry of Justice system. The bank registers the mortgage. The process is increasingly digitized, with the possibility of completing some steps online.

Frequently asked questions about buying property in Saudi Arabia

Can a foreigner buy property in Saudi Arabia?

Yes, under certain conditions. Foreign residents (valid iqama holders) can purchase property for personal use with approval from the Ministry of Interior. Premium Residency holders have more flexibility. Non-residents can invest in certain special economic zones and mega-projects. Purchases in Mecca are reserved for Saudi citizens and GCC nationals, but long-term leases (99 years) are available for foreigners.

Can RETT be exempted?

Yes, certain exemptions exist. The Sakani program offers RETT exemption for a Saudi citizen's first home, up to 1 million SAR. Beyond that, the 5% RETT applies on the excess amount. Donations between first and second-degree relatives also benefit from exemptions. Real estate transactions related to inheritance and transfers in case of divorce are also exempt under certain conditions. Check your eligibility through the Sakani portal.

How does Islamic property financing work?

Property financing in Saudi Arabia follows Islamic finance principles. The most common structure is Murabaha: the bank buys the property then resells it to the borrower with a profit margin (equivalent to an interest rate). Ijara (lease-to-own) is also popular. Effective rates are comparable to conventional rates, generally between 4% and 7%. Monthly repayments are fixed throughout the contract. The property serves as collateral and remains in the bank's name until full repayment.

What is the minimum down payment in Saudi Arabia?

The minimum down payment depends on financing type and borrower profile. For commercial bank financing, the minimum is generally 10% for a first home and 30% for a second property or investment. With the Sakani/REDF program, the down payment can be reduced through subsidies. The Saudi Central Bank (SAMA) sets prudential rules: the LTV (Loan-to-Value) ratio cannot exceed 90% for a first home and 70% for subsequent properties.

What is the Ejar rental program?

Ejar (إيجار) is the Ministry of Housing's electronic platform for registering and managing rental contracts in Saudi Arabia. Since 2018, Ejar registration has been mandatory for all rental contracts. The platform protects landlord and tenant rights, facilitates rent collection and serves as an official reference in disputes. For landlords, Ejar registration is necessary to enforce legal rights. The platform also offers digital brokerage services.

What annual charges does a Saudi owner pay?

After purchasing in Saudi Arabia, recurring costs include: mortgage payments, service charges (for apartments, typically 50-200 SAR/m2/year), home insurance (not mandatory but recommended), maintenance costs (budget 1-2% of property value per year), and utility bills (electricity, water via SEC and NWC). There is no annual property tax in Saudi Arabia. If you rent out the property, rental income is not subject to personal income tax.

Saudi real estate glossary

RETT (ضريبة التصرفات العقارية)

Real Estate Transaction Tax – 5% tax on real estate transactions in Saudi Arabia, replacing VAT on property since 2020.

Sakani (سكني)

Government housing assistance program offering subsidies, RETT exemptions and access to subsidized housing for Saudi citizens.

REDF (صندوق التنمية العقارية)

Real Estate Development Fund – government fund offering interest-free subsidized loans for Saudi citizen homeownership.

Wafi (وافي)

Off-plan sales regulation program in Saudi Arabia, ensuring project registration and buyer protection through escrow accounts.

Murabaha

Islamic financing structure where the bank buys the property and resells it to the borrower with a fixed profit margin, Sharia-compliant.

Sak Malakiya (صك ملكية)

Official title deed issued by the Ministry of Justice. Electronic document registered in the judicial system proving property ownership.

SAMA

Saudi Arabian Monetary Authority (Saudi Central Bank) – regulates financial institutions and sets prudential rules for property financing.

Ejar (إيجار)

Mandatory electronic platform for registering and managing rental contracts in Saudi Arabia, operated by the Ministry of Housing.

Premium Residency

Permanent residence visa for qualified foreigners, granting the right to purchase property and invest freely in Saudi Arabia.

Sakani Program

Saudi government housing initiative providing subsidized home loans, land grants, and down payment assistance to Saudi citizens. Eligible beneficiaries can receive interest-free loans or discounted financing through the Real Estate Development Fund (REDF) for their first property purchase.

Ejar Platform

Official Saudi government digital platform for registering and managing residential and commercial lease contracts. All rental agreements must be registered on Ejar to be legally recognized, providing transparency and protecting the rights of both landlords and tenants.