Can you buy and rent out a place in Riyadh as a foreigner?

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 legally rent out a property in Riyadh once they own it?

Yes, foreigners can legally rent out properties in Riyadh once they own them, provided they meet specific residency requirements.

Under Saudi Arabia's Vision 2030 reforms implemented as of September 2025, foreign property owners with valid residency permits (Iqama) or Premium Residency status can purchase and subsequently rent out residential properties in Riyadh. Non-residents must invest through approved joint ventures or property funds to access rental opportunities.

The legal framework requires all rental activities to be registered through the mandatory Ejar platform, which serves as the official government system for rental contract registration and monitoring. Foreign landlords must work with licensed local real estate brokers to ensure compliance with Saudi rental regulations.

Premium Residency holders enjoy broader investment rights compared to standard Iqama holders, making property rental more straightforward for this category of foreign investors. The Saudi government has specifically designed these reforms to attract foreign investment while maintaining regulatory oversight of the rental market.

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

Are there any restrictions on the types of properties foreigners can rent out?

Foreigners can rent out apartments, villas, and townhouses in designated residential areas, but several property types remain restricted.

The Saudi government permits foreign ownership and rental of completed residential properties including modern apartments, standalone villas, and townhouse developments within approved zones. These properties must be located in areas specifically designated for foreign investment, typically in major urban centers and new development projects.

Undeveloped land, agricultural properties, and real estate in the holy cities of Mecca and Medina are completely prohibited for foreign ownership and rental. Military zones, border areas, and certain strategic locations also remain off-limits to non-Saudi investors.

Commercial properties require additional approvals from the General Authority of Real Estate and may involve more complex licensing procedures. Mixed-use developments where foreigners own residential units can typically be rented out, but the commercial portions may have separate restrictions.

The restriction system ensures foreign investment flows into approved sectors while protecting sensitive areas and maintaining national security considerations.

Do you need a special license or permit to rent out a property as a foreigner?

Foreign property owners need valid Saudi residency permits and must register all rental activities through licensed brokers on the Ejar platform.

A valid Iqama (residency permit) or Premium Residency status serves as the primary legal requirement for foreign landlords in Riyadh. Premium Residency holders enjoy streamlined procedures and broader investment rights compared to standard residency permit holders.

For commercial properties or multiple property portfolios, additional approvals from the Ministry of Investment or the General Authority of Real Estate may be required. These approvals typically involve demonstrating financial capacity and compliance with local investment regulations.

All rental contracts must be processed through the mandatory Ejar platform by certified real estate brokers, effectively requiring foreign landlords to work with licensed local professionals. This system ensures compliance with Saudi rental laws and provides legal protection for both parties.

The licensing requirements are designed to maintain market transparency while enabling legitimate foreign investment in the Saudi residential rental sector.

What local laws regulate rental agreements between foreigners and tenants?

The Ejar platform serves as the primary legal framework regulating all rental agreements in Saudi Arabia, including those involving foreign landlords.

Legal Framework	Application	Enforcement
Ejar Platform Registration	Mandatory for all rental contracts	Government monitored
Saudi Rental Law	Tenant rights and landlord obligations	Real estate courts
Contract Standardization	Unified terms and conditions	Platform enforcement
Dispute Resolution	Mediation and arbitration procedures	Ejar system first, courts if needed
Payment Protection	Regulated payment schedules	Platform monitoring
Property Standards	Minimum habitability requirements	Municipal inspections
Termination Procedures	Notice periods and exit conditions	Legal documentation required

How do you register a rental contract with the authorities in Riyadh?

Rental contract registration in Riyadh must be completed through the Ejar platform using a certified real estate broker.

The registration process begins when both landlord and tenant provide valid identification documents to a licensed real estate broker who has access to the Ejar system. Foreign landlords must present their Iqama or Premium Residency documentation, while tenants provide their identification cards or residency permits.

All contract details including rental amounts, payment schedules, property specifications, and contact information are digitally recorded on the Ejar platform. The system automatically generates legally binding contracts that comply with Saudi rental regulations.

Registration fees typically range from 200 to 500 Saudi Riyals depending on the property value and contract duration. The digital registration creates an official record that can be accessed by both parties and serves as legal proof of the rental agreement.

Once registered, the contract becomes legally enforceable and provides access to the Ejar dispute resolution system if conflicts arise between landlords and tenants.

Are there limitations on who you can rent to as a foreign landlord?

Foreign landlords can rent to Saudi nationals, expatriates, and corporate entities, provided all contracts are properly registered through the Ejar platform.

The Saudi rental market allows foreign property owners to lease to any legal resident or entity within the Kingdom, including local Saudi families, expatriate workers, multinational corporations, and government agencies. Tenant selection is primarily based on financial capacity and lease agreement terms rather than nationality restrictions.

Corporate tenants often provide more stable rental income and longer lease terms, making them attractive options for foreign investors. Many international companies operating in Riyadh require housing for expatriate employees, creating consistent demand for quality rental properties.

Certain high-security areas or properties near sensitive government installations may have additional screening requirements for tenants, but these restrictions apply to all landlords regardless of nationality. Religious or cultural considerations may influence tenant preferences, but legal discrimination is prohibited.

The Ejar registration system ensures all tenant relationships are documented and legally compliant, providing protection for foreign landlords regardless of tenant nationality or background.

What taxes or fees apply to rental income earned by foreigners in Riyadh?

Foreign landlords in Riyadh pay 20% income tax on rental earnings after allowable deductions, plus various transaction fees.

1. **Rental Income Tax**: 20% on net rental income after deducting property management fees, maintenance costs, and depreciation2. **Property Transaction Tax**: 5% tax applies when purchasing the property initially3. **VAT on Services**: 15% value-added tax on real estate agent commissions and property management fees4. **Ejar Registration Fees**: 200-500 Saudi Riyals per contract registration depending on property value5. **Annual Property Tax**: Currently no annual property tax as of September 20256. **Capital Gains Tax**: May apply when selling the property, depending on holding period and residency status7. **Banking Fees**: Transaction costs for international money transfers when repatriating rental income

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

Do you need a local property manager or agent to handle rentals legally?

A licensed local real estate broker is mandatory for registering rental contracts on the Ejar system, and many foreign landlords also employ property managers.

Saudi law requires all rental agreements to be processed through certified real estate brokers who have official access to the Ejar platform. These brokers handle the legal registration, contract creation, and initial compliance procedures that foreign landlords cannot complete independently.

Property management services, while not legally required, are commonly used by foreign landlords who live outside Saudi Arabia or prefer professional handling of tenant relations. Property managers typically charge 5-10% of monthly rental income and handle maintenance, rent collection, and tenant communications.

Licensed brokers typically charge one-time fees ranging from 2-5% of annual rental value for contract registration and legal compliance. Ongoing property management services involve separate monthly or annual fee structures.

Foreign landlords who reside in Saudi Arabia can potentially handle day-to-day property management themselves after the initial Ejar registration, but must still work through licensed brokers for any contract modifications or new tenant registrations.

How are rental disputes between landlords and tenants usually resolved in Riyadh?

Rental disputes in Riyadh follow a structured resolution process starting with Ejar mediation and potentially escalating to specialized real estate courts.

The Ejar platform provides the first level of dispute resolution through its built-in mediation system, where trained mediators review contract terms and attempt to resolve conflicts between landlords and tenants. This digital mediation process typically takes 15-30 days and resolves approximately 70% of rental disputes without court involvement.

Unresolved disputes escalate to real estate arbitration committees or specialized commercial courts in Riyadh, which have jurisdiction over property-related conflicts. These courts typically schedule hearings within 60-90 days and issue binding decisions based on Saudi rental law and Ejar contract terms.

Common dispute categories include late rent payments, property maintenance responsibilities, security deposit returns, and early lease terminations. The Ejar system maintains detailed records of all transactions and communications, providing clear evidence for dispute resolution.

Foreign landlords benefit from the standardized dispute process, as language barriers and cultural differences are addressed through official translation services and clear legal procedures that protect both parties' rights.

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.

Are there minimum or maximum lease terms that foreigners must follow?

Standard residential leases in Riyadh typically run for 12 months with renewal options, while commercial leases can extend up to 50 years.

The Ejar platform standardizes most residential rental agreements to annual terms, providing stability for both landlords and tenants while allowing for yearly rent adjustments based on market conditions. Shorter-term leases of 6 months are possible but require special justification and may involve higher monthly rates.

Lease extensions and renewals are handled through the Ejar system, with most residential contracts automatically offering renewal options at market rates. Foreign landlords can negotiate multi-year agreements for stable, long-term tenants, typically up to 3-5 years for residential properties.

Commercial and mixed-use properties follow different regulations, with lease terms potentially extending up to 50 years for major commercial developments. These longer-term commercial leases often involve foreign corporate tenants and require additional government approvals.

Early termination clauses are standardized through the Ejar platform, typically requiring 60-90 days notice and potential penalty payments depending on contract terms and remaining lease duration.

Can rental income be sent abroad freely, or are there restrictions on transferring money out of Saudi Arabia?

Rental income can generally be repatriated abroad, especially for Premium Residency holders, but must comply with Saudi banking and anti-money laundering regulations.

Foreign landlords with Premium Residency status enjoy streamlined procedures for international money transfers, including rental income repatriation. Standard Iqama holders can also transfer rental earnings abroad but may face additional documentation requirements and transfer limits.

Saudi banks typically require proof of legitimate rental income through Ejar contract documentation, tax payment receipts, and property ownership certificates before approving international transfers. Monthly transfer limits vary by bank and account type, ranging from 50,000 to 500,000 Saudi Riyals for individual accounts.

Anti-money laundering compliance requires detailed documentation of income sources, particularly for large or frequent international transfers. Banks may request additional verification for transfers exceeding certain thresholds or involving high-risk destination countries.

Currency exchange rates and international transfer fees typically reduce the net amount received abroad by 1-3% of the total transfer value. Some foreign landlords maintain Saudi bank accounts to accumulate rental income before making larger, less frequent international transfers to minimize fees.

What practical challenges do foreign landlords usually face when renting out in Riyadh?

Foreign landlords in Riyadh commonly encounter bureaucratic complexity, language barriers, and tenant payment delays as primary operational challenges.

1. **Bureaucratic Navigation**: Complex Ejar registration procedures and frequent policy changes require ongoing legal compliance monitoring2. **Language Barriers**: Arabic documentation requirements and communication with tenants often necessitate translation services3. **Reliable Local Partners**: Finding trustworthy property managers and maintenance contractors can be time-consuming and expensive4. **Tenant Payment Delays**: Late rent payments are common, particularly during economic downturns or seasonal employment changes5. **Maintenance Standards**: Meeting Saudi property habitability requirements while managing costs and contractor reliability6. **Market Volatility**: Rental rates fluctuate based on oil prices and economic conditions, affecting income predictability7. **Cultural Considerations**: Understanding local tenant expectations and religious observances that may affect property use

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. 2025 Guide to Property Ownership in Saudi Arabia for Non-Saudis
2. Saudi Arabia Buy Rent Out Guide
3. Your Guide to Ejar System for Tenants
4. Lease Agreement Guidelines
5. Saudi Arabia Cuts Property Taxes for Foreign Investors 2025
6. Real Estate Saudi Arabia New Law Foreigners
7. Rights of Tenants in Saudi Arabia
8. Real Estate Disputes in Saudi Arabia