How to buy property 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 (Saudi Arabia, UAE, Qatar, 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 legally buy property in Saudi Arabia and are there any restrictions on what they can own?

Foreigners can legally buy property in Saudi Arabia, but significant restrictions apply based on residency status and location.

The primary requirement is holding a valid Iqama (residency permit), though exceptions exist for Premium Residency holders and certain licensed foreign companies. As of June 2025, the law allows foreign individuals and companies to own property (outside of Mecca and Medina), subject to regulatory approval and investment conditions.

Key restrictions include complete prohibition of direct ownership in the holy cities of Mecca and Medina, where foreigners can only obtain usufruct (leasehold) rights for up to 99 years. Non-Saudis are restricted from acquiring ownership or usufruct rights of real estate within the boundaries of Mecca and Medina, except through inheritance. Additionally, foreigners cannot freely purchase land anywhere in the Kingdom, are prohibited from owning property in military or border zones, and are limited to one residential property with a maximum area of 3,000 square meters per individual.

The regulatory framework has evolved significantly under Vision 2030, with new laws introduced in February 2025 expanding opportunities for international buyers by allowing property ownership in areas like King Abdullah Economic City, NEOM, and other major urban developments. Special Economic Zones offer even more favorable conditions, with some allowing 100% foreign ownership and providing tax incentives to attract international investors.

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

What are the main cities or areas where foreigners typically buy property in Saudi Arabia and why?

Foreign property buyers concentrate in major economic centers and special development zones that offer the best investment potential and lifestyle amenities.

Riyadh leads as the top destination, particularly neighborhoods like El Olaya and Al Malqa, which attract foreigners due to modern infrastructure, strong business opportunities, and high rental demand from the expanding expatriate workforce. The capital city benefits from government mega-projects and serves as the Kingdom's financial hub.

Jeddah ranks second, drawing international buyers to its coastal location and upscale neighborhoods. The city's thriving commercial activity, proximity to the Red Sea, and role as a gateway to Mecca make it attractive for both residential living and investment purposes. Areas like Al Hamra, Al Andalus, and Al Rawdah are particularly popular among foreign investors.

The Eastern Province cities of Dammam and Dhahran appeal primarily to oil industry professionals and their families. These locations offer a mix of residential and commercial investment opportunities, supported by the region's energy sector employment and established expatriate communities.

Special Economic Zones represent the most attractive options for foreign investors, offering unique advantages. NEOM, King Abdullah Economic City (KAEC), and the Red Sea Project offer 100% foreign ownership and tax incentives, making them attractive for international investors. These developments provide modern infrastructure, streamlined regulations, and exemptions from many traditional ownership restrictions.

Mountain regions like Abha in Asir Province attract buyers seeking cooler climates, scenic mountain views, and growing tourism sector opportunities, offering a different lifestyle compared to the desert cities.

What types of properties are available to buy (villas, apartments, land), and are there any limits on ownership duration?

The Saudi property market offers various options for foreign buyers, though restrictions apply to certain property types and locations.

Property Type	Availability to Foreigners	Restrictions/Requirements
Apartments	Widely available	Must have valid Iqama, maximum 3,000 sqm per person
Villas	Widely available	Most popular choice for families and investment
Commercial Properties	With special permissions	Minimum SAR 30 million investment threshold
Industrial Properties	Licensed companies only	Must be linked to business operations
Land (Raw/Agricultural)	Generally prohibited	Exceptions for specific commercial schemes
Mixed-Use Developments	Available in special zones	NEOM, KAEC, and similar projects
Office Buildings	For business purposes	Must support licensed commercial activities

Ownership duration is typically permanent (freehold) for approved residential and commercial properties in most areas of the Kingdom. The right to own shall be for the purpose of housing for the owner or his family, establishing clear residential use requirements. However, for restricted zones like Mecca and Medina, only long-term leaseholds up to 99 years are available to non-Saudis.

Foreign companies with proper licensing can invest in and develop real estate if the development value exceeds SAR 30 million and construction is completed within five years of land acquisition. This requirement ensures active development rather than speculative land holding.

What is the step-by-step process to buy a property in Saudi Arabia as a foreigner?

The property purchase process in Saudi Arabia follows a structured sequence requiring multiple approvals and documentation.

1. **Secure Legal Residency Status**: Obtain a valid Iqama (residency permit) or apply for Premium Residency, which is mandatory for most property purchases. Premium Residency options include permanent residency for SAR 800,000 or temporary residency starting at SAR 100,000 annually.2. **Property Selection and Location Verification**: Identify suitable properties in areas open to foreign ownership, avoiding restricted zones like Mecca and Medina unless seeking a 99-year lease arrangement.3. **Obtain Government Approvals**: Apply for approval from the Ministry of Investment or Ministry of Interior, depending on the property type and location. This step can take several weeks and requires comprehensive documentation.4. **Conduct Due Diligence**: Verify property title, legal status, zoning compliance, and developer reputation. Engage local legal counsel to review all documentation and ensure clear title transfer.5. **Secure Financing (if applicable)**: If using a mortgage, complete the bank application process with required salary verification (minimum SAR 25,000-30,000 monthly) and prepare the down payment (15-30% of property value).6. **Execute Purchase Agreement**: Sign the Property Sale Agreement (Akad Bait) with the seller, outlining all terms, conditions, payment schedules, and completion timelines.7. **Complete Payment**: Transfer the agreed amount either in full cash payment or through approved mortgage financing arrangements.8. **Property Registration**: Register the transaction with the Ministry of Justice through the local notary public office to obtain the official title deed and complete ownership transfer.9. **Pay All Fees and Taxes**: Settle the 5% Real Estate Transaction Tax (RETT), registration fees (1-2%), legal fees (1-2%), and any applicable municipal charges.

What documents are mandatory to complete a property purchase, and which ones are optional but recommended?

Property purchases in Saudi Arabia require extensive documentation to ensure legal compliance and smooth transaction completion.

**Mandatory Documents:**- Valid passport and current Iqama (residency permit) with at least 6-12 months remaining validity- Proof of income or financial stability through salary certificates and bank statements from the last 6 months- Property description, detailed floor plans, and official survey reports- Government approval letter from the Ministry of Investment or Ministry of Interior- Property Sale Agreement (Akad Bait) properly executed and notarized- Title deed verification and property ownership history documentation**Recommended Documents:**- Good conduct certificate from your home country and Saudi Arabia- Employer verification letter confirming position, salary, and employment duration- Property valuation report from a licensed appraiser- Legal advisor report for complex transactions or commercial properties- Insurance documentation for property protection- Property inspection report highlighting any structural or maintenance issues

The documentation process has become more streamlined as part of Saudi Arabia's Vision 2030 digitization efforts, with many approvals now processed through online platforms. However, physical verification and notarization remain requirements for final registration.

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

Can I buy property in Saudi Arabia remotely, without physically being in the country?

Remote property purchases are technically possible but come with significant risks and practical limitations that make physical presence highly advisable.

Yes, foreign buyers can complete property transactions remotely by appointing a local legal representative or licensed real estate agent with power of attorney. This allows the representative to handle document signing, approvals, and registration on the buyer's behalf. However, this approach requires absolute trust in your local representative and comprehensive verification of all documentation.

The risks of remote purchasing include potential fraud, inability to physically inspect the property, difficulty verifying actual property conditions, challenges in understanding local market dynamics, and potential communication barriers with local authorities. Many buyers who attempt remote purchases encounter unexpected complications that require personal presence to resolve.

Remote buyers should implement strict due diligence measures, including engaging multiple independent local advisors, conducting virtual property tours with verified agents, requiring extensive photographic and video documentation, obtaining independent property valuations, and maintaining direct communication with all transaction parties.

For significant investments, most experts strongly recommend visiting Saudi Arabia to personally inspect properties, meet with agents and legal advisors, understand neighborhood dynamics, and complete final documentation in person. This approach minimizes risks and ensures better investment outcomes.

Is it possible to buy property in Saudi Arabia with cash, or is a mortgage required?

Cash purchases are not only possible but often preferred in Saudi Arabia's real estate market, with no requirement to use mortgage financing.

Cash transactions offer several advantages in the Saudi market, including faster completion times, stronger negotiating positions with sellers, elimination of financing approval delays, and avoidance of mortgage-related fees and requirements. Many foreign buyers choose cash purchases to simplify the process and demonstrate serious commitment to sellers.

Mortgage financing remains available for eligible foreign buyers who prefer leveraging their investment or preserving cash for other opportunities. However, financing options for foreigners remain limited, with stricter eligibility criteria compared to Saudi nationals.

The choice between cash and mortgage depends on individual financial strategies, cash flow preferences, and investment goals. Cash buyers benefit from simplified transactions and immediate ownership, while mortgage users can leverage their capital across multiple investments or preserve liquidity for other purposes.

For high-value properties or commercial investments, many foreign buyers combine approaches, making substantial cash down payments while using mortgages for the remaining balance to optimize their capital allocation and tax efficiency.

Are mortgages available to foreigners, and if so, what are the typical rates, down payments, and eligibility criteria?

Mortgages are available to foreign residents with valid Iqama permits, but eligibility requirements are stricter than for Saudi nationals.

Requirement	Standard Criteria	Additional Notes
Minimum Salary	SAR 25,000-30,000/month	Government or semi-government sector preferred
Residency Status	Valid Iqama required	6-12 months minimum remaining validity
Down Payment	15-30% of property value	Higher for non-residents
Loan-to-Value (LTV)	70-85% maximum	Varies by bank and property type
Maximum Term	Up to 25 years	Some sources indicate 10-year limits
Financing Structure	Sharia-compliant only	Murabaha or Ijarah arrangements
Employment Sector	Government/semi-government	Private sector with higher requirements

Saudi banks offer mortgage financing options to eligible foreign buyers, including Al Rajhi Bank, National Commercial Bank, Riyad Bank, Saudi British Bank (SABB), Arab National Bank, and Bank AlJazira. These institutions provide Sharia-compliant financing structures that replace traditional interest-based loans with profit-sharing arrangements.

Interest rates vary based on market conditions and are structured as profit rates under Islamic banking principles. Mortgage rates for a 20-year term range between 2% and 6%, providing borrowers with highly competitive conditions for securing financing. The actual rate depends on the borrower's profile, property type, and chosen bank.

Mortgages are generally not available for non-residents, requiring buyers to establish residency before accessing financing options. The application process typically takes 2-6 weeks, requiring comprehensive financial documentation and property valuation.

What are all the taxes, fees, and additional costs involved in the purchase process (agent fees, legal fees, registration, etc.)?

Property purchase costs in Saudi Arabia typically total 6-7% of the property value, with the Real Estate Transaction Tax representing the largest single expense.

- **Real Estate Transaction Tax (RETT)**: 5% of property value, payable by the buyer, introduced in October 2020 and calculated based on the property's sale value- **Registration fees**: 1-2% of property value for official title transfer and notarization services- **Legal fees**: 1-2% of property value for attorney services, contract review, and due diligence- **Real estate agent commission**: 2.5% typically paid by the seller, though sometimes negotiated to be shared- **Property valuation**: SAR 2,000-5,000 for official appraisal services- **Municipal fees**: Small ongoing charges for local services and utilities connection- **Mortgage registration fee**: 0.5% of mortgage amount if financing is used- **Bank processing fees**: SAR 1,000-3,000 for mortgage applications and approvals

VAT is imposed at 15% on the property's value for new properties and commercial real estate, though residential resales are typically exempt. The VAT applies primarily to new construction sales and commercial transactions.

Additional costs may include property insurance (SAR 1,000-5,000 annually), home inspection fees (SAR 1,500-3,000), and utility connection charges. Buyers should budget approximately 7-8% of the property value to cover all transaction costs and initial setup expenses.

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 long does the full property purchase process usually take, from making an offer to getting the keys?

The complete property purchase timeline in Saudi Arabia typically ranges from 1-3 months, depending on property type, financing arrangements, and approval complexity.

For cash purchases of existing properties, the process can be completed in 4-8 weeks if all documentation is prepared efficiently. New construction or off-plan purchases may extend to 3-6 months due to additional developer approvals and completion requirements.

The timeline breaks down into distinct phases: initial offer and agreement (1-2 weeks), government approvals and due diligence (2-4 weeks), financing approval if applicable (2-3 weeks), and final registration and key handover (1-2 weeks). Complex transactions involving commercial properties or special economic zones may require additional time for specialized approvals.

Factors that can accelerate the process include having all documents prepared in advance, working with experienced local agents and attorneys, choosing properties in straightforward ownership zones, and using cash instead of financing. Delays commonly occur due to incomplete documentation, complex approval requirements, financing complications, or issues discovered during due diligence.

As of June 2025, digital transformation initiatives under Vision 2030 have streamlined many approval processes, with some government services now available online, reducing traditional bureaucratic delays.

How reliable are real estate agents and legal professionals in Saudi Arabia, and how do you choose a trustworthy one?

Saudi Arabia's real estate market features increasingly regulated and professional service providers, though careful selection remains crucial for successful transactions.

The Real Estate General Authority (REGA) now requires licensing for all real estate agents and brokers, creating higher professional standards and accountability. The Real Estate General Authority (REGA) regulates the country's real estate sector and provides guidance and assistance to potential buyers, offering resources to verify licensed professionals.

International firms like JLL, Knight Frank, Colliers, and CBRE operate in major Saudi cities, providing high professional standards and extensive market knowledge. Local firms with proper licensing also offer valuable expertise, particularly regarding cultural nuances and regulatory requirements.

**Criteria for selecting trustworthy professionals:**- Verify current licensing with REGA and relevant professional bodies- Review client testimonials, references, and track record of completed transactions- Assess market knowledge through detailed discussions about local conditions and regulations- Evaluate communication skills and responsiveness to inquiries- Confirm insurance coverage and professional liability protection- Check association memberships with recognized real estate organizations

For legal professionals, ensure attorneys have specific experience in Saudi property law, foreign ownership regulations, and cross-border transactions. Many international law firms now have Saudi offices, offering both local expertise and international standards.

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

What are the most common mistakes foreigners make when buying property in Saudi Arabia, and how can you avoid them?

Foreign property buyers in Saudi Arabia frequently encounter preventable pitfalls that can result in significant financial losses or legal complications.

**Most Common Mistakes and Prevention Strategies:**1. **Ignoring Ownership Restrictions**: Many foreigners attempt to buy property in prohibited areas or exceed ownership limits. Always verify that your chosen property is in an area open to foreign ownership and confirm legal compliance before making offers.2. **Inadequate Due Diligence**: Skipping thorough property inspections, title verification, and developer background checks leads to unexpected problems. Engage qualified local attorneys and building inspectors to thoroughly investigate all aspects of the property and transaction.3. **Overlooking Cultural and Legal Requirements**: Misunderstanding Saudi business practices, Sharia-compliant financing, or local customs can create transaction delays. Work with experienced local professionals who understand both international and Saudi requirements.4. **Underestimating Total Costs**: Focusing only on purchase price while ignoring the 6-7% in additional fees, taxes, and costs creates budget shortfalls. Prepare comprehensive budgets including RETT tax, legal fees, registration costs, and ongoing maintenance expenses.5. **Remote Purchasing Without Verification**: Buying properties sight unseen through online platforms or unverified agents increases fraud risk. When possible, visit properties personally or engage multiple independent local representatives for verification.6. **Rushing Transaction Timelines**: Attempting to complete purchases too quickly without proper approvals or documentation leads to legal complications. Allow adequate time for all approval processes and maintain patience throughout the regulatory requirements.7. **Inadequate Legal Representation**: Using inexperienced attorneys or attempting DIY approaches for complex transactions creates unnecessary risks. Invest in qualified legal counsel with specific expertise in foreign property ownership and Saudi real estate law.

Successful foreign buyers typically invest time in understanding local market conditions, build relationships with trusted local professionals, conduct extensive research before committing, and maintain realistic expectations about timelines and processes.

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. Trowers & Hamlins - Vision to Reality: Foreign Ownership Laws in Saudi Arabia
2. Legal 500 - Foreign Ownership of Real Estate in Saudi Arabia
3. Crown Continental - Can Foreigners Buy Property in Saudi Arabia 2025 Guide
4. IR Global - Foreign Ownership of Real Estate in Saudi Arabia
5. Al Tamimi & Company - Foreign Ownership Rights and Restrictions
6. STA Law Firm - Property Law in Saudi Arabia
7. Arab MLS - Can Foreigners Get a Mortgage in Saudi Arabia
8. Arab MLS - Real Estate Fees and Taxes in Saudi Arabia
9. Sands of Wealth - Buying Property in Saudi Arabia as a Foreigner
10. Real Estate Saudi - Financing Your Property in Saudi Arabia