Saudi Real Estate Tax Guide 2026: RETT (5%), Exemptions & Foreigner Fees

As Saudi Arabia opens its property market to foreign buyers and expatriate residents under Vision 2030, understanding the tax structure is essential for anyone purchasing real estate in the Kingdom. In 2026, the primary taxation mechanism for property transactions is the Real Estate Transaction Tax (RETT), enforced by the Zakat, Tax and Customs Authority (ZATCA).

Whether you are buying a primary home in Riyadh, a luxury villa in Diriyah, or a commercial asset in Al Khobar, here is your definitive 2026 guide to Saudi real estate taxes, exemptions, and foreigner-specific fees.

Key Takeaways

• Standard RETT Rate: The Real Estate Transaction Tax is fixed at 5% of the property’s total agreed transaction value, replacing VAT on property sales.
• No Annual Property Tax: Saudi Arabia does not charge a recurring annual property tax or municipal council tax on individual homeowners.
• Foreign Disposals Fee: Non-Saudi property sellers may face an additional disposal fee of up to 5% upon resale, bringing the total transaction fee burden to approximately 10%.
• Exemptions Available: ZATCA offers 21 specific RETT exemptions, including property transfers between immediate family members (spouses, parents, children).

How Does RETT Work in 2026?

The Real Estate Transaction Tax (RETT) applies to all disposals of land (developed or undeveloped) and completed residential, commercial, or industrial buildings across Saudi Arabia.

Key operational rules under ZATCA guidelines include:

• Timing of Payment: RETT must be registered and paid via SADAD or official government portals before the final title deed (Sakk) transfer is executed at the notary public or via the digital Najiz portal.
• Legal Responsibility: Legally, the seller is responsible for ensuring the tax is paid. However, buyers and sellers frequently agree in the purchase contract on how the cost is shared.
• Fair Market Value Checks: ZATCA enforces automated valuation checks to ensure declared sale prices reflect true market value, preventing tax evasion through under-reporting.

Common RETT Exemptions

ZATCA maintains specific exemption categories where the 5% tax is waived upon submission of verifying documents:

1. First-Degree Family Transfers: Property gifted or transferred between spouses, parents, children, and siblings is exempt from RETT.
2. Inheritance & Estates: Property distribution among legal heirs following a death is non-taxable.
3. Charitable & Public Interest: Transfers to registered charitable organizations or government entities for infrastructure projects are exempt.
4. Corporate Restructuring: Transfers between parent companies and wholly-owned subsidiaries undergo special relief mechanisms.

Special Tax Rules for Foreign Property Owners

Following the enactment of the 2026 Law of Real Estate Ownership by Non-Saudis, international buyers enjoy equal purchasing rights in designated zones. However, specific tax considerations apply:

Resale Disposal Fees: When a non-Saudi owner sells a property in the Kingdom, government regulations may levy a resale disposal fee of up to 5% in addition to standard transaction processing fees. Investors should factor this into their net ROI calculations.

White Land Tax (2.5%): While individual homeowners face no annual property taxes, investors acquiring undeveloped urban land (White Land) designated for development are subject to an annual 2.5% tax to discourage land hoarding.

Frequently Asked Questions

Is there Value Added Tax (VAT) on buying property in Saudi Arabia?

No. Real estate sales are exempt from the standard 15% VAT and are instead governed by the 5% Real Estate Transaction Tax (RETT).

Who pays RETT—the buyer or the seller?

According to ZATCA regulations, the seller is legally responsible for paying the tax. However, in practice, the buyer and seller can contractually agree on who pays the 5% fee during title deed transfer.

Are there annual property taxes in Saudi Arabia?

No, Saudi Arabia does not levy annual recurring property taxes on personal residential or commercial buildings. The only annual land tax is the 2.5% White Land Tax on undeveloped plots.

Need expert advice on navigating property acquisition and tax compliance in Saudi Arabia? Contact Lebami today to consult with our real estate specialists.