Property Buyer Cost Guide for Riyadh: Taxes, Fees and Regulatory Compliance

Primary Purchase Tax: Real Estate Transaction Tax (RETT)

The fundamental tax payable when acquiring property in Riyadh is the Real Estate Transaction Tax (RETT). Administered by the Zakat, Tax and Customs Authority (ZATCA), RETT applies a flat rate of 5% to the total transaction value or the fair market valuation, whichever is higher. Introduced in October 2020 to replace the previous 15% Value Added Tax (VAT) on real estate sales, RETT remains the principal transaction levy in 2026.

Under Saudi tax regulations, the legal obligation to pay RETT rests with the seller. However, market practice in Riyadh frequently sees buyers and sellers negotiating who absorbs this cost, or splitting it during commercial negotiations. RETT must be settled via ZATCA's electronic portal before the transfer of ownership can be registered at the notary or through the digital land registry.

Exemptions apply in limited cases. First-time Saudi home buyers purchasing a primary residence priced up to SAR 1,000,000 benefit from a government-funded RETT exemption on that initial million. Commercial property conveyances, however, may attract 15% VAT on service components or commercial leases depending on the transaction structure.

Brokerage Commissions and Administrative Caps

Real estate brokerage in Riyadh is governed by the Real Estate General Authority (REGA) under the Real Estate Brokerage Law. REGA caps broker commission at 2.5% of the total property purchase price. Paying commissions above 2.5% violates regulatory rules.

Brokerage fees are subject to 15% VAT, meaning a standard 2.5% commission incurs an effective charge of 2.875% of the purchase price. Customarily, the buyer pays the broker commission in residential resale transactions across Riyadh, though commercial deals may split the fee by mutual written agreement.

REGA mandates that all real estate agents hold a valid FAL licence. Furthermore, down payments held by brokers are legally capped at 5% of the contract value. Any broker contract must be executed digitally and registered on REGA's Ejar or official brokerage platform to be legally enforceable. Default broker agreements without an explicit end date automatically expire after 90 days.

Legal, Registration and Title Deed Transfer Fees

Saudi Arabia has transitioned from traditional notary-led conveyancing under the Ministry of Justice to a centralized digital cadastre operated by the National Real Estate Registration Services Company (Real Estate Registry or RER).

For properties located in designated spatial zones managed by RER, initial land registration and title deed issuance carry administrative registration fees typically ranging between 0.5% and 1% of the property value, capped by official fee schedules. Subsequent title updates for existing registered plots incur fixed processing charges payable directly through the RER platform.

Where transactions occur outside fully rolled-out RER zones, title transfer is conducted through the Ministry of Justice's Najiz portal or accredited public notaries. Direct notary transfers by public officials do not charge a state transfer fee beyond applicable RETT. Private legal counsel hired to draft custom sale and purchase agreements (SPAs) or conduct title due diligence typically charge independent fixed legal fees ranging between SAR 10,000 and SAR 50,000 depending on transaction complexity.

Recurring Annual Taxes and Holding Fees

Saudi Arabia does not impose a general annual municipal property tax on occupied residential or operational commercial real estate. Once a property is built and occupied, ongoing state holding costs are minimal.

However, specific annual levies target land hoarders and vacant assets. The White Land Fee system, regulated by the Ministry of Municipalities and Housing, targets undeveloped plots of urban land within designated Riyadh city boundaries. Following updated executive regulations in 2026, the fee uses a tiered annual structure reaching up to 10% of the land's assessed market value. This measure prevents land speculation and encourages development.

Additionally, regulations allow annual vacant property fees of up to 5% to 10% on residential or commercial buildings left unoccupied for six months or longer within a reference year. For apartments and villas in master-planned communities or managed towers, owners pay annual service charges to developer-managed owners' associations to cover common area maintenance.

Requirements for Non-Resident Foreign Buyers

Foreign individuals, companies and non-resident investors buying property in Riyadh operate under the Law of Real Estate Ownership by Non-Saudis and its Executive Regulations. Non-Saudi purchases must be submitted through REGA's official "Saudi Properties" portal.

To acquire title, a non-resident individual must obtain a verified Saudi digital identity (via Saudi diplomatic missions abroad), acquire a national identification number, and register an authorized domestic bank account. Foreign corporate entities must register with the Ministry of Investment (MISA) through the Invest Saudi portal and obtain a national unified number prior to completing purchase filings.

Foreign purchasers face additional administrative registration levies and compliance costs up to 5% upon registration or future disposal. Total buyer closing costs for international buyers in Riyadh typically total between 8.9% and 12% of the property value when combining RETT, agency commissions, legal services and foreign registration fees. While non-Saudis can buy residential and commercial assets in approved zones across Riyadh, property ownership in the holy cities of Makkah and Madinah remains restricted.

Transaction completion timelines via the digital RER or Najiz portals range from 3 to 10 business days once all regulatory approvals from MISA and REGA are secured. Buyers should ensure all funds flow through licensed Saudi financial institutions to satisfy anti-money laundering requirements.