Real Estate Tax for Non-Saudis | Rates and Exemptions 2026
Real Estate Tax for Non-Saudis is a key element of Saudi Arabia’s evolving investment landscape, reflecting the Kingdom’s commitment to transparency, sustainable growth, and Vision 2030.
As part of its modern financial framework, Saudi Arabia applies Real Estate Tax for Non-Saudis to regulate foreign property ownership and guide international investment toward sectors that support long term economic development.
In this guide by Habitare Real Estate, we walk you through everything you need to know, from the core concept of the tax to how it is calculated, applicable rates by property type and location, available exemptions, and payment procedures.
What Is Meant by Real Estate Tax for Non-Saudis?
Real Estate Tax for Non-Saudis is a government levy imposed on real estate transactions involving non-Saudi individuals or entities.
A real estate transaction refers to any legal action that transfers ownership or grants the right to use or benefit from a property.
The objective is to ensure a balanced and transparent property market while allowing foreign investors to participate confidently in Saudi Arabia’s real estate sector under a clear legal framework.
The Real Estate Tax Rate for Non-Saudis and How It Is Calculated
Under the draft executive regulations of the Foreign Property Ownership Law, the General Real Estate Authority may collect a tax of up to 5 percent of the total value of a non-Saudi’s disposition of in rem rights over a property.
For residential properties in Riyadh, Jeddah, Makkah, and Madinah, the applicable rate is 2.5 percent.
Commercial, industrial, and agricultural units in these cities are subject to a 0 percent rate.
In special economic zones, usufruct rights on investment properties are taxed at 2.5 percent, while residential units remain exempt at 0 percent.
All other regions of the Kingdom benefit from a 0 percent rate on usufruct rights for both residential and investment properties, encouraging development beyond major urban centers.
How Is Real Estate Tax Calculated?
Within Saudi investment regulations, the tax is calculated based on the total transaction value agreed upon by the buyer and seller, provided it reflects fair market value at the time of transfer.
Financing costs are excluded from the taxable value when the transaction involves licensed financing entities, meaning the implicit profit margin added by lenders is not subject to tax.
When and How to Pay the Real Estate Tax for Non-Saudis
Real Estate Tax for Non-Saudis must be paid upon transferring ownership or possession, no later than the official notarization date. Property transfers cannot be finalized without proof of payment.
The tax applies to all property types, whether completed or off plan, and is paid electronically through the Zakat, Tax and Customs Authority portal.
Exemptions from Real Estate Tax for Non-Saudis
Certain transactions are subject to a 0 percent rate, including:
- Transfers executed pursuant to a final court judgment.
- Transactions resulting from expropriation for public benefit or temporary possession.
- Transfers without consideration to an endowment, whether public, private, or joint, provided they are officially documented.
- Transactions where the property is returned to its original non-Saudi owner within 90 days of the initial registration.
- Property divisions between co-owners, provided no partner’s share increases as a result.
Legal and Financial Advice for Foreign Real Estate Investors from the Habitare Real Estate Team
If you are considering purchasing property in Saudi Arabia, we recommend the following:
Stay informed about updates to real estate tax regulations for foreigners, as legislative developments continue alongside Vision 2030.
Evaluate location carefully based on your investment goals. Prime commercial areas may not offer the same returns or lifestyle appeal for residential ownership.
Rely on certified valuation reports from trusted firms to avoid disputes over fair market value.
Ensure all transactions are properly documented and taxes are paid on time to avoid future penalties or legal issues.
How Can Habitare Real Estate Support You?
Habitare Real Estate provides comprehensive advisory services to help you navigate Saudi Arabia’s real estate tax landscape with clarity and confidence.
Our team offers full legal support to ensure smooth, transparent transactions.
We also assist with long term investment planning and deliver detailed feasibility studies, empowering you to make informed decisions based on accurate and up to date insights.
If you are seeking refined real estate opportunities aligned with your budget and aspirations, contact us today.
Edited by: Habitare Real Estate ©
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Frequently Asked Questions
Is the real estate tax for non-Saudis different from that for Saudis?
No. The real estate tax rate does not exceed 5 percent for both Saudis and non-Saudis.
Are there any exemptions from real estate tax for foreigners?
Yes. Certain transactions are subject to a 0 percent rate, including court ordered transfers, endowments, expropriation for public benefit, property returns within 90 days, and qualifying co ownership divisions.
Can a non-resident own property in Saudi Arabia?
Yes. A non-resident may own property in Saudi Arabia provided that they obtain a digital identity activated through Absher, open a local bank account, and register a Saudi contact number using the digital identity.
