When is Saudi’s new 2% foreign-buyer fee paid?

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Is Saudi Arabia’s 2% property fee really paid when a foreigner buys?

Usually no: Saudi Arabia’s current 2% rule is tied to a non-Saudi disposing of a real-estate right, so a normal foreign purchaser should not automatically add 2% to the amount due on purchase day.

The confusion comes from how the new rule is often summarized. Saudi Arabia’s updated non-Saudi ownership law lets the Real Estate General Authority, or REGA, charge up to 5% of the value when a non-Saudi disposes of a real-estate right. The Executive Regulations now set that charge at 2% in Riyadh, Makkah, Madinah and Jeddah.

The Arabic regulation is quite specific. It refers to the value of the non-Saudi’s “disposition” of the right. For a foreign individual buying an apartment from somebody else, the buyer is acquiring the right. The clearest moment when that 2% rule catches the same investor comes later, when the foreign owner sells or otherwise transfers the right.

That changes the cash-flow calculation quite a lot. A buyer looking at a SAR 2 million apartment should not automatically assume that another SAR 40,000 is due simply because the passport is foreign.

What changed under Saudi Arabia’s new foreign-property rules?

Saudi Arabia has now moved from a broad legal ceiling of 5% to a working 2% fee in four important markets, while also opening a much clearer digital route for non-Saudis to own property.

The updated ownership system has been in force since early 2026. REGA now accepts applications through its Saudi Properties portal, which is connected to the Real Estate Registry. Residents, non-residents and eligible companies each follow their own application route.

The 2% number appeared at the implementing-regulation stage. The underlying law had only said that REGA’s fee could reach 5%. Today, Article 9 of the Executive Regulations gives us the actual rate to use: 2% for dispositions in Riyadh, Makkah, Madinah and Jeddah.

Older explanations saying “up to 5%” are legally understandable, but they are not enough for a current transaction model. For now, 2% is the operative rate in those locations.

Rule	What it currently does	Rate	What a buyer should take from it
Non-Saudi Ownership Law	Gives REGA power to charge on a non-Saudi’s disposition	Up to 5%	This is the legal ceiling
Executive Regulations	Sets the current rate in four locations	2%	This is the number to model today
Real Estate Transaction Tax	Taxes real-estate transactions separately	5%	Do not mix it with the REGA fee
Other locations	Generally zero-rate this REGA fee	0%	The 2% charge is not nationwide

So when is Saudi Arabia’s 2% non-Saudi property fee actually paid?

For a normal foreign owner, Saudi Arabia’s 2% fee belongs to the disposal process, although the published regulation does not give us a separate universal deadline such as “pay within seven days of signing.”

The legal trigger is clear: a covered disposition by the non-Saudi. The exact operational moment is less explicitly spelled out.

The current regulations say that applications to acquire or dispose of real-estate rights go through REGA’s electronic portal. They also require the non-Saudi’s property-related financial transactions to use approved electronic payment methods, while registration is completed through the Real Estate Registry.

So today we would expect the 2% charge to be dealt with inside that disposal and registration journey, rather than treated as a bill that can simply be ignored until weeks after the transfer.

We should avoid borrowing the payment deadline from Saudi Arabia’s separate 5% Real Estate Transaction Tax and pretending REGA has published the same deadline for its 2% fee. The two charges sit under different rules.

Does a foreign owner usually pay the Saudi 2% fee when selling?

Yes: a foreign owner selling a covered property is the clearest everyday case where Saudi Arabia’s 2% non-Saudi disposition fee applies.

Take a foreign investor who owns a Riyadh apartment and later sells it for SAR 2.6 million. At the current 2% rate, the fee would be SAR 52,000.

The calculation starts from the disposition value. It does not start from the investor’s original purchase price and it does not depend on how much profit was made.

That can make the fee much more important than the 2% headline suggests. If the apartment had originally cost SAR 2 million, the nominal price gain would be SAR 600,000. A SAR 52,000 fee would consume about 8.7% of that gain before brokerage, financing, maintenance and other transaction costs.

For anyone planning to hold Saudi property for only a few years, that exit cost deserves more attention than its small percentage initially suggests.

Does Saudi Arabia’s 2% foreign-owner fee come on top of the 5% property tax?

Yes, the 2% REGA fee and Saudi Arabia’s 5% Real Estate Transaction Tax are separate charges, but treating them as a universal “7% foreign-buyer tax” gives the wrong picture.

Saudi Arabia’s RETT applies at 5% under its own legislation. The non-Saudi ownership law expressly allows REGA’s fee to apply alongside other taxes and statutory charges.

What changes is who is doing what in the transaction and when each rule is triggered. A foreign purchaser should therefore resist the simple calculation of “5% + 2% = 7% due when I buy.”

The cleaner approach is to keep acquisition taxation and the future foreign-owner disposal charge on separate lines. That avoids turning an exit cost into an entry cost.

Charge	Current rate	What triggers it	Best way to model it
Saudi RETT	5%	Real-estate transaction	Transaction-stage tax
REGA non-Saudi fee	2% in covered areas	Disposition by a non-Saudi	Usually an exit/disposal cost for the foreign owner
REGA fee outside the four listed areas	Generally 0%	Disposition outside Article 9 locations	No automatic 2% charge
Brokerage and private costs	Varies	Contract or service	Separate commercial cost

When is Saudi Arabia’s 5% Real Estate Transaction Tax paid?

Saudi Arabia’s 5% RETT is much clearer on timing: the tax becomes due on the date of the real-estate transaction and can be paid beforehand.

That makes RETT easier to place in a buyer’s transaction timeline than the newer 2% REGA fee.

ZATCA’s current system requires the real-estate transaction to be registered so that the tax treatment, exemptions and amount due can be established. For a normal documented transfer, the tax is therefore closely tied to completion rather than to some distant later payment date.

The disposer is also central to the RETT registration process. The parties may agree commercially that the buyer reimburses some of the cost, but that private arrangement should not be confused with the statutory mechanics.

For buyers comparing advertised prices, the useful question is not only “what tax rate applies?” but also “who is legally responsible, and who does the contract say will actually bear the cost?”

Where does Saudi Arabia currently charge the 2% non-Saudi fee?

Saudi Arabia currently applies the 2% non-Saudi disposition fee in Riyadh city, Makkah city, Madinah city and Jeddah Governorate.

Article 9 of the Executive Regulations applies that rate to all listed real-estate rights and all uses within those areas. Article 10 then gives a 0% rate to dispositions outside the Article 9 scope, subject to the rest of the ownership framework.

There is a subtle geographic point here. The regulation refers to Riyadh, Makkah and Madinah as cities, while Jeddah is described as a governorate. Buyers should therefore use the official Saudi Properties mapping rather than assume that colloquial city boundaries always match the legal scope.

Ownership permission and fee treatment also remain two different questions. A foreigner may first need to establish that the property and type of ownership are permitted. Only after that do we ask what fee applies when the right is eventually disposed of.

Area named in Article 9	Current REGA fee	Rights covered	Uses covered
Riyadh city	2%	All types covered by the regulation	All uses
Makkah city	2%	All types covered by the regulation	All uses
Madinah city	2%	All types covered by the regulation	All uses
Jeddah Governorate	2%	All types covered by the regulation	All uses
Other locations	Generally 0%	Subject to ownership rules	Subject to ownership rules

Is Saudi Arabia’s 2% fee only for selling a freehold apartment?

No. Saudi Arabia’s 2% rule covers dispositions of real-estate rights more broadly, so we cannot reduce it to a tax on ordinary apartment resales.

That can include situations where the owner holds another registrable right over the property rather than conventional freehold title.

This is particularly relevant in projects marketed using terms such as usufruct, long-term rights or investment ownership. The marketing label is less important than the legal right recorded in the transaction and ultimately in the Real Estate Registry.

Article 9 also applies across all uses in the four covered locations. Residential property does not receive a special lower rate under this rule.

Before modelling the charge, we therefore need to know exactly which real-estate right the foreign buyer will hold and later dispose of.

Can a foreign owner sell Saudi property without paying the 2% fee?

Yes. Saudi Arabia’s current regulations contain several 0% cases, so a non-Saudi disposing of property does not automatically owe 2% every time a right changes hands.

The biggest exemption is geographic: dispositions outside the four Article 9 locations are generally zero-rated for this fee.

Article 10 also covers several specific situations. These include estate division, disposals required by final judicial decisions, public-interest expropriation, certain transfers without consideration to an endowment or public legal entity, and partitions of jointly owned property where nobody’s share increases.

A qualifying reversal also receives 0% treatment. If the property is returned to the non-Saudi who previously disposed of it within 180 days, and the property description and agreed consideration have not changed, the regulations allow a zero rate.

Foreign developers have another important provision. Qualifying sales of units developed on land owned by the non-Saudi can also receive 0% treatment when the development and timing conditions are met.

Type of disposition	Current REGA treatment	Main condition	Why it is different
Ordinary covered disposal in the four Article 9 areas	2%	No specific zero-rate applies	Standard covered case
Disposal outside Article 9 areas	0%	Property outside listed scope	Geographic zero rate
Estate division	0%	Qualifying division	Not treated like an ordinary sale
Court-ordered transfer	0%	Final judgment or competent order	Compelled transfer
Return to previous non-Saudi owner	0%	Within 180 days and conditions met	Qualifying reversal
Certain qualifying developer sales	0%	Development and sale deadlines met	Specific developer treatment

Does the Saudi 2% fee depend on how much profit the foreign seller makes?

No. Saudi Arabia’s 2% foreign-owner fee is based on the value of the disposition, so a seller can owe the same fee after a large gain, a small gain or even a loss.

Suppose three foreign owners each sell a covered Riyadh property for SAR 3 million. One originally paid SAR 1.5 million, another paid SAR 2.8 million and the third paid SAR 3.2 million.

At today’s 2% rate, the starting REGA fee is SAR 60,000 in all three examples. Their investment results are completely different, but the disposition value is the same.

This becomes painful when returns are modest. A seller making only SAR 200,000 before costs would see a SAR 60,000 charge absorb 30% of that nominal gain.

For investment modelling, “2%” should never be read as “2% of the profit.” It is 2% of the covered disposition value.

How expensive is Saudi Arabia’s 2% fee in real money?

Saudi Arabia’s 2% non-Saudi fee works out to SAR 20,000 for every SAR 1 million of covered disposal value, which becomes meaningful surprisingly quickly.

A SAR 1.5 million disposal produces SAR 30,000. At SAR 3 million, the charge reaches SAR 60,000. A SAR 5 million sale produces SAR 100,000.

The effect is even clearer when we compare the fee with appreciation rather than with the whole sale price. Suppose a SAR 2 million property rises 10% and is sold for SAR 2.2 million. The nominal gain is SAR 200,000, while the 2% charge on the disposal is SAR 44,000.

That one fee alone would take 22% of the nominal price gain. Brokerage and other selling costs would reduce the investor’s return further.

Disposal value	2% REGA fee	Fee per SAR 1m sold	Fee compared with a 10% gain
SAR 1,000,000	SAR 20,000	SAR 20,000	20%
SAR 1,500,000	SAR 30,000	SAR 20,000	20%
SAR 2,000,000	SAR 40,000	SAR 20,000	20%
SAR 3,000,000	SAR 60,000	SAR 20,000	20%
SAR 5,000,000	SAR 100,000	SAR 20,000	20%

Does buying Saudi off-plan property avoid the 2% fee later?

No automatic off-plan exemption exists for an ordinary foreign buyer, so buying before construction is finished does not make the future 2% disposal rule disappear.

The regulations do contain a special 0% rule for qualifying developer sales. A non-Saudi that owns land, develops units and sells them within the required development and sale periods can fall within that provision.

That is much narrower than saying all off-plan purchases are exempt.

A consumer who buys an apartment off plan today and later becomes the registered owner still needs to look at the rules in force when that right is eventually sold. If the owner later makes a covered disposition in Riyadh, Jeddah, Makkah or Madinah and no exemption applies, the 2% rule can become relevant then.

For an ordinary buyer, off plan changes the acquisition structure. It does not give a general lifetime exemption from the foreign-owner disposal fee.

Can a Saudi developer make the foreign buyer pay the 2% anyway?

Yes, a contract can shift the economic cost to the foreign buyer, even when the legal rule itself is framed around the non-Saudi’s disposition.

This is where statutory liability and the amount a buyer actually pays can diverge.

A developer might quote a unit price plus government charges. Another project might advertise an all-inclusive number. A resale contract could also say that one side reimburses fees that would otherwise fall on the other side.

That means a buyer should ask for the cost breakdown before signing rather than rely on a salesperson saying “foreigners pay 2%.”

The useful document is a written schedule showing the property price, RETT treatment, any REGA fee actually being charged in that transaction, brokerage, registration expenses, financing costs and service charges. If 2% appears on the purchase statement, the buyer should ask what precise transaction event is triggering it.

What does a non-resident foreign buyer need before buying Saudi property?

A non-resident foreign individual currently needs a Saudi digital identity, a Saudi bank account in the buyer’s own name and a Saudi phone number linked to that digital identity before acquiring property.

These requirements come directly from the Executive Regulations and are part of Saudi Arabia’s new electronic ownership process.

REGA also requires property-related financial dealings by non-Saudis to run through approved electronic payment methods. The Saudi Properties portal now handles the application journey and connects with the Real Estate Registry.

So even though the 2% fee is mainly an eventual disposal issue for a typical buyer, the banking and identity setup starts before acquisition.

This is one of the practical changes that makes the new regime easier to trace. The acquisition, payment and registration trail is more tightly connected than under a process built around paper permissions and separate manual steps.

Could Saudi Arabia raise the 2% foreign-owner fee later?

Yes. Saudi Arabia currently charges 2%, while the underlying law still allows REGA to impose as much as 5% on covered non-Saudi dispositions.

There is no reason today to put 5% into a normal base-case calculation. The operative regulation says 2%.

Still, somebody buying a property with a ten-year holding period should know that the rate is set below the statutory ceiling.

The size of that risk is easy to see. On a future SAR 4 million sale, 2% costs SAR 80,000. At the 5% legal ceiling, the same calculation would be SAR 200,000.

We would treat 2% as the current base case and 5% as a sensitivity test rather than as a forecast. There is currently no solid basis for saying the rate will actually rise.

Should foreign buyers reserve 2% of the Saudi property price today?

Foreign buyers should build the 2% fee into their long-term return calculation now, but they generally should not assume another 2% of the purchase price must be handed over just because they are buying.

Consider a foreign investor paying SAR 2.5 million for a Riyadh apartment. Adding SAR 50,000 automatically to the acquisition cheque would misread the current rule.

Suppose the investor later sells for SAR 3 million while today’s rules are still in place. The disposal fee would then be SAR 60,000.

That future SAR 60,000 still affects whether the original investment makes sense. It belongs in the same forward-looking calculation as resale brokerage, even though neither expense is necessarily paid when the property is purchased.

For a buyer comparing two Saudi investments today, the cleanest model separates cash needed to acquire the property from the cost of eventually getting out.

When is Saudi’s new 2% foreign-buyer fee paid?

Saudi Arabia’s current 2% fee is mainly a disposal-stage charge for a non-Saudi owner, so a typical foreign buyer should expect it to become relevant when the property or real-estate right is later sold or otherwise transferred, rather than automatically when the property is first bought.

The legal text is clearer about the trigger than the precise payment timestamp. Article 9 covers the non-Saudi’s disposition, while the Executive Regulations route acquisitions and dispositions through REGA’s digital system, require approved electronic payment methods and connect the process to the Real Estate Registry. The regulations do not currently give the 2% fee a simple standalone deadline such as seven days before registration or 30 days after signing.

That leaves a fairly clear practical answer. A foreign buyer in Riyadh, Jeddah, Makkah or Madinah should put 2% into the future exit model from the day the property is bought, but should not automatically treat it as another purchase-day tax.

The separate 5% RETT follows its own rules and has its own timing. Collapsing the two charges into “foreign buyers pay 7%” hides the distinction that matters most: the 5% tax belongs to the real-estate transaction framework, while the current 2% REGA charge specifically follows a covered disposition by the non-Saudi.

Fact-checked and reviewed by our local expert

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Abdullah 🇸🇦

Founder of Expat Legal Counsel Saudi

Abdullah is the founder of Expat Legal Counsel Saudi, a platform helping foreigners navigate Saudi legal matters with clear, confidential, and practical support. He is familiar with Saudi Arabia’s real estate market and the legal questions that foreign residents and investors often need to understand.

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SANDS OF WEALTH

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