Saudi Arabia Confirms 5% Real Estate Tax Applies to All Buyers

The Saudi Real Estate Authority (REGA) confirmed this week that the 5% real estate transaction tax applies equally to Saudi nationals and foreign buyers across all cities in the kingdom. A separate 2% fee also applies to non-Saudi purchasers, REGA said in a statement.

The clarification resolves ambiguity around whether foreign investors faced a different tax rate than local buyers. Some market participants had assumed the 5% levy applied only to Saudi nationals, with non-Saudis subject to a higher combined charge. REGA's statement makes clear the base rate is uniform, with the additional 2% fee layered on top for foreign transactions.

The 5% tax is calculated on the property's sale price and is due at the time of registration. The 2% fee for non-Saudis is collected alongside it. REGA did not specify whether the fee applies to all foreign buyers or only those from certain countries.

Saudi Arabia has been opening its real estate market to foreign investment as part of the Vision 2030 economic diversification plan. The kingdom relaxed ownership rules for non-Saudis in designated development zones in recent years. The tax clarification gives foreign buyers a clearer cost structure when evaluating property purchases in Riyadh, Jeddah, and other cities.

REGA's statement did not address whether the 2% fee applies to commercial property transactions or only residential purchases. The authority said it would issue further guidance on implementation details in the coming weeks.