How to buy a house in Saudi Arabia?

Authored by the expert who managed and guided the team behind the Saudi Arabia Property Pack

Everything you need to know before buying real estate is included in our Saudi Arabia Property Pack

Who is the author of this content?

SANDS OF WEALTH

A team specialized in real estate investing in MENA countries (Morocco, UAE, Oman, etc.)

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Saudi Arabia. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At Sands of Wealth, we explore the Saudi Arabian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Riyadh, Jeddah, and Dammam. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Can foreigners actually buy property in Saudi Arabia and what restrictions apply?

Yes, foreigners can buy property in Saudi Arabia as of 2025, but ownership is restricted to designated urban zones and specific property types.

The Saudi Arabian government enacted new real estate ownership laws that allow non-Saudis, both residents and non-residents, to purchase property in approved urban areas. However, the holy cities of Makkah and Madinah remain off-limits for freehold ownership, with only 99-year leasehold arrangements permitted.

Ownership restrictions also apply to protected areas, military zones, and border regions where additional government approvals are mandatory. Agricultural and commercial properties require extra licensing from relevant ministries before purchase can proceed.

The Premium Residency or "Golden Visa" program offers broader property rights, but it's not mandatory for most property purchases. This program requires either SAR 800,000 as a one-time payment for permanent residency or SAR 100,000 annually for renewable status.

It's something we develop in our Saudi Arabia property pack.

What types of properties can foreigners buy and which ones are completely off-limits?

Foreigners can purchase residential apartments, villas, and commercial buildings in approved zones, while agricultural land requires ministry approval.

Property Type	Availability	Additional Requirements
Residential Apartments	Permitted in approved zones	Zone verification only
Residential Villas	Permitted in approved zones	Zone verification only
Commercial Buildings	Permitted with licensing	Ministry of Commerce approval
Agricultural Land	Restricted	Ministry of Environment approval
Makkah/Madinah Properties	99-year lease only	Special religious authority approval
Border/Military Zones	Prohibited	Not available to foreigners
Industrial Properties	Restricted	SAGIA and ministry approvals

How does buying property in Saudi Arabia compare to Western countries in terms of difficulty?

The Saudi Arabian property buying process is more complex than most Western countries due to zoning restrictions and mandatory government approvals.

Unlike Western markets where foreigners typically need only local municipality approval, Saudi Arabia requires ministerial clearance from the Ministry of Investment or Interior. This multi-step approval process can take 2-4 weeks compared to same-day approvals common in countries like the United States or United Kingdom.

The documentation requirements are more extensive, with mandatory Arabic translations and notarization for all contracts. Property zones must be verified as foreigner-eligible before purchase, which doesn't exist in most Western markets where property ownership is broadly available to international buyers.

However, the total costs of 5-9% of property value are comparable to Western countries, though the tax structure differs with Saudi Arabia's 5% Real Estate Transaction Tax being more straightforward than complex stamp duty systems found in countries like the UK.

What are the exact step-by-step procedures for purchasing a house in Saudi Arabia?

The Saudi Arabian property purchase process involves 8 mandatory steps that must be completed in sequence.

1. **Secure residency status** - Obtain an Iqama (residence permit) if you're a resident, or apply for Premium Residency for easier approvals, though neither is mandatory for purchase.2. **Identify and verify property location** - Ensure the property is located in zones open to foreign ownership through the Ministry of Investment database.3. **Obtain government approvals** - Apply to the Ministry of Investment or Interior for purchase clearance, providing property details and personal documentation.4. **Conduct legal due diligence** - Verify title history, property zoning compliance, and developer reputation through a licensed Saudi legal advisor.5. **Arrange financing** - Apply for mortgage approval if needed, providing income proof and residency documentation to Saudi banks.6. **Execute sale agreement** - Sign the "Akad Bait" purchase contract detailing payment terms, timeline, and conditions in both Arabic and English.7. **Complete payment and registration** - Transfer funds through official banking channels and register the transaction with the Ministry of Justice or authorized notary.8. **Pay taxes and finalize transfer** - Pay the 5% Real Estate Transaction Tax, registration fees, and complete the title deed transfer process.

Which documents are mandatory and which ones are optional for the purchase?

Seven documents are mandatory for any property purchase in Saudi Arabia, while four additional documents are strongly recommended.

**Mandatory Documents:**

- Valid passport with current entry stamp- Current Iqama (residence permit) if applicable- Proof of income and bank statements from the last 6 months- Property description and official survey report- Ministry of Investment approval letter- Notarized purchase contract (Akad Bait) in Arabic- Original title deed and complete property history documentation

**Recommended Documents:**

- Good conduct certificate from your home country- Employer verification letter with salary confirmation- Independent property valuation report- Property inspection report and insurance documentation

All foreign documents must be translated to Arabic by certified translators and notarized by Saudi authorities before submission.

Can you complete the entire purchase process without physically being in Saudi Arabia?

Yes, the complete property purchase can be executed remotely using a notarized power of attorney system.

Remote purchases require a power of attorney document that must be notarized in your home country and translated to Arabic by certified translators. This document allows a licensed Saudi lawyer or authorized agent to act on your behalf throughout the entire transaction process.

The power of attorney must specifically authorize your representative to sign contracts, transfer funds, complete government applications, and register the property title. However, you'll still need to open a Saudi bank account for fund transfers, which can be done through international banking relationships.

Many foreign buyers use this remote option successfully, though having a trusted legal representative familiar with Saudi real estate law is essential for protecting your interests during the transaction.

What are the taxes, fees, and costs involved with a clear breakdown?

Total costs for buying property in Saudi Arabia range from 5-9% of the property value, significantly lower than many Western markets.

Cost Category	Percentage/Amount	When Paid
Real Estate Transaction Tax (RETT)	5% of property value	At registration
Registration Fees	1-2% of property value	At title transfer
Legal Fees	1-2% of property value	During due diligence
Real Estate Agent Commission	2-3% of property value	At contract signing
Notary and Municipal Charges	0.1-0.5% of property value	At documentation
Translation and Documentation	SAR 2,000-5,000 fixed	Before contract
Premium Residency (optional)	SAR 800,000 or SAR 100,000/year	Before purchase

Is it possible to buy property with cash and how common is this approach?

Cash purchases are permitted and extremely common in the Saudi Arabian real estate market, especially among foreign investors.

Approximately 60-70% of foreign property transactions in Saudi Arabia are completed with cash due to banking restrictions and mortgage qualification challenges for non-residents. Cash buyers can complete transactions faster, typically within 4-6 weeks compared to 8-12 weeks for financed purchases.

Cash payments must be transferred through official banking channels with proper documentation of fund sources. Saudi banks require anti-money laundering compliance, so large cash transfers need proof of legal income sources from your home country.

The advantage of cash purchases includes stronger negotiation power, faster closing times, and no mortgage approval delays. However, buyers should still conduct full due diligence and legal verification regardless of payment method.

It's something we develop in our Saudi Arabia property pack.

Are mortgages available for foreigners and what are the conditions?

Mortgages are available to foreigners with proven residency and adequate income, typically requiring SAR 25,000-30,000 monthly salary.

Saudi banks offer mortgage financing to expatriate residents with valid Iqama permits and stable employment contracts. Interest rates range from 5-8% annually, depending on the bank relationship and borrower profile. Down payments typically range from 15-30% of the property value.

**Mortgage Requirements:**

- Valid Iqama with at least 2 years validity remaining- Employment contract with Saudi-based company- Minimum monthly salary of SAR 25,000-30,000- Clean credit history and debt-to-income ratio below 50%- Property insurance and life insurance coverage- Bank relationship history preferred

Processing time for mortgage approval ranges from 2-4 weeks, and most banks require the property to be in approved zones for foreign ownership. Some Islamic banks offer Sharia-compliant financing options as alternatives to conventional mortgages.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Saudi Arabia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How reliable are real estate agents in Saudi Arabia and how can you avoid being misled?

Real estate agents in Saudi Arabia are regulated by REGA (Real Estate General Authority), but quality and reliability vary significantly across the market.

Licensed agents must register with REGA and display their credentials, but the industry is still developing professional standards compared to mature Western markets. Many agents lack deep knowledge of foreign buyer requirements and legal complexities.

**Red Flags to Avoid:**

- Agents requesting informal cash payments or "under the table" arrangements- Promises of guaranteed returns or unrealistic rental yields- Pressure to buy off-plan properties without escrow guarantees- Refusal to provide written fee structures or transparent contracts- Claims that government approvals aren't necessary for foreign buyers

**Best Practices:**

- Verify REGA registration through official channels- Insist on detailed due diligence reports- Use agents recommended by established law firms- Request references from previous foreign clients- Never transfer funds directly to agents without legal verification

Working with agents who specialize in foreign transactions and have proven track records with international buyers significantly reduces risks and complications.

Will the legal system protect foreign buyers and what precautions should you take?

The Saudi legal system provides adequate protection for foreign property buyers through REGA oversight, but taking proper precautions remains essential.

The Real Estate General Authority (REGA) oversees all foreign property transactions and maintains official registries for title verification. All property deals must be registered through official channels to receive legal protection under Saudi law.

**Essential Legal Precautions:**

- Always use legal advisors familiar with Saudi real estate law- Verify property titles through official REGA databases- Ensure all contracts include both Arabic and English versions- Never transfer funds until contract validity and title clearance are confirmed- Register all transactions through Ministry of Justice or authorized notaries- Maintain comprehensive documentation of all payments and approvals

Saudi courts generally uphold properly documented and registered property rights for foreigners. However, dispute resolution can be lengthy, making prevention through proper legal procedures far more effective than seeking remedies after problems arise.

Foreign buyers should budget for quality legal representation throughout the purchase process rather than attempting to navigate the system independently.

What are the most common mistakes foreigners make when buying property in Saudi Arabia?

The most frequent mistake is purchasing property outside designated foreign ownership zones, which can result in transaction nullification.

1. **Buying in restricted zones** - Purchasing in areas not approved for foreign ownership, including proximity to military bases or border regions2. **Skipping government approvals** - Attempting to complete transactions without proper Ministry of Investment clearance, leading to invalid ownership3. **Inadequate due diligence** - Failing to verify developer reputation, title history, or property zoning compliance through official channels4. **Using unlicensed intermediaries** - Working with unregistered agents or informal brokers who cannot provide legal protection or proper documentation5. **Ignoring translation requirements** - Signing contracts without proper Arabic translations or notarization, creating legal vulnerabilities6. **Underestimating timelines** - Expecting Western-style quick closings without accounting for Saudi bureaucratic processes and approval requirements7. **Informal payment arrangements** - Making cash payments outside official banking channels or to unauthorized parties, violating anti-money laundering laws8. **Neglecting insurance requirements** - Failing to secure proper property and title insurance before completing purchase transactions

It's something we develop in our Saudi Arabia property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. White & Case - Saudi Arabia Landmark Real Estate Ownership Law
2. AHYSP - Saudi Arabia Foreign Property Ownership
3. UNCTAD - Saudi Arabia New Law Expanding Foreign Ownership
4. Times of India - Saudi Arabia Property Ownership Law
5. Arab MLS - Foreigner Property Purchase Guide
6. Sands of Wealth - Saudi Arabia Real Estate for Foreigners
7. HKTDC - Saudi Arabia Real Estate Research
8. Sands of Wealth - How to Buy Property in Saudi Arabia
9. YB Case - Real Estate Purchase in Saudi Arabia
10. Real Estate Saudi - Foreigner Property Buying Guide