Buy a Property in Saudi Arabia

If you want to buy a property in Saudi Arabia as a foreigner, the most important thing to know is that you can under certain conditions. This applies to buying apartments and houses in Saudi Arabia. Below, our local specialists explain the main restrictions applicable to buying properties in Saudi Arabia for foreigners, and also the conditions under which such an acquisition can take place.

Quick Facts
Specific legislation applicable (YES/NO)	– Sharia Law, – the Off-Plan Sales Law, – the Real Estate Brokerage Act
Possibility to acquire Saudi properties by foreigners (YES/NO)	Yes, with certain restrictions.
Types of properties that can be purchased in Saudi Arabia	One can acquire both residential and commercial properties in Saudi Arabia.
Real estate due diligence required (YES/NO)	No, however, such a process can be useful. You can rely on our specialists for due diligence procedures.
Documents to draft for property acquisition	– copies of valid passport and residence permit, – letter of good behaviour, – copy of the survey report on the property, – recent bank statement, – details about the property (location, size, type).
Financing options availability (YES/NO)	Yes, through mortgage.
Special property acquisition programs for foreign citizens (YES/NO)	Yes, the Premium Residency Program available for those who buy or obtain usufruct rights over Saudi residential real estate.
Time frame to acquire a property (approx.)	1 – 2 months
Taxes to consider upon a property purchase	– real estate transaction tax (5% of the contract value) paid by the buyer, – Zakat or wealth tax (2.5% of the property value) paid by the seller, – registration fees, – legal fees
Land Registry registration requirement (YES/NO)	Yes, registration must be completed with the Survey and Land Registration Bureau.
Best cities to buy properties in Saudi Arabia	– Riyadh, – Jeddah, – Dammam, – Abha. In holy cities like Mecca, foreigners can obtain usufruct rights for up to 99 years.
Residency requirements for foreign citizens buying real estate	Yes, the Saudi Iqama is a must to buy a property as a foreigner in Saudi Arabia.
Possibility to appoint a local representative during the transaction (YES/NO)	Yes
Property tax rates in Saudi Arabia	– capital gains taxes for companies, – rental income tax for foreigners (if they rent the property), – municipality fees
Support in buying a property in Saudi Arabia (YES/NO)	Yes, feel free to contact us for support in acquiring Saudi real estate.

Who can buy property in Saudi Arabia?

A few years ago, the Saudi government lifted some of the restrictions prohibiting foreigners from buying properties.

Here are some of the main restrictions still in place when it comes to buying a property in Saudi Arabia for foreigners:

• foreign ownership is restricted to residents having Saudi Iqamas (standard residence permits);
• it is not possible to buy land in Saudi Arabia as a foreigner;
• property ownership is not permitted in holy cities like Makkah and Madinah, however, usufruct rights are granted for 99 years;
• properties should only be used for residential purposes, otherwise, additional licenses may be necessary;
• permission from the appropriate authorities is required.
• ownership is prohibited in protected areas, such as those near borders and military bases;
• the property’s size cannot exceed 3,000 square meters;
• each foreigner can only own one property.

If you want to buy a house in Saudi Arabia, you can choose any of the cities that are not on the list of restricted areas. Many foreigners choose to buy apartments in Jeddah for this reason.

If you are interested in immigration to Saudi Arabia to buy a property here, we advise you to get in touch with our dedicated lawyers for complete information.

We also have an infographic on how to buy real estate in Saudi Arabia:

Options for foreigners who are not long-term residents to buy properties in Saudi Arabia

One of the main requirements to buy a flat or house in Saudi Arabia as a foreigner is to be a long-term resident. However, this is not the only option one has.

Foreigners can also acquire Saudi real estate by forming joint ventures or partnerships with Saudi nationals or corporations.

Leasing possibilities include:

• long-term leases;
• long-term leaseholds.

Even if this is not true ownership, it can help you settle in Saudi Arabia for the long term.  Apart from this, you can rely on our Saudi company formation agents for support in setting up your own business here.

Documents required to buy property in Saudi Arabia

If you meet the requirements to buy a property in Saudi Arabia and want to go ahead with the procedure, here are the documents you need to prepare:

• a letter that specifies the type, size, and location of the property;
• a copy of your current passport, as well as a copy of your initial passport, which was registered when you first came to Saudi Arabia;
• a copy of your and your spouse’s valid residence permits (if applicable);
• a letter from your employer verifying your income and conduct;
• a copy of the building permit (if applicable);
• a copy of the survey report;
• a copy of a recent bank statement (no older than 6 months);
• a building map that indicates the size of the property and its surroundings;
• a written declaration that the property is for residential use.

With respect to the authorization to obtain, foreigners who want to buy properties in Saudi Arabia must address the General Real Estate Authority.

Here is also our video on this subject:

Real estate transaction costs in Saudi Arabia

If you want to buy a flat in Saudi Arabia, such as an apartment in Jeddah, here are the main costs associated with such a transaction:

• the real estate transfer tax which is 5% of the property price;
• the Zakat, or the wealth tax, which is 2.5% of the property value;
• the rental income tax which is 5% of the gross rental value for foreigners (for those who rent their properties).

Our accountants in Saudi Arabia can advise on property taxes in this country.

We remind you that you cannot buy land in Saudi Arabia as a foreigner, so if you decide on a house or apartment, please contact us.