Saudi Arabia Introduces a 2% Fee on Certain Foreign Real Estate Disposals
The Saudi Arabia has issued the Executive Regulations of the Law on Foreign Ownership of Real Estate, introducing a 2% fee on the value of a non-Saudi’s disposal of real rights over real estate located in Riyadh, Makkah, Madinah, and Jeddah.
Highlights
- A 2% fee applies to the sale of real estate or the disposal of real rights by non-Saudis in the four designated cities.
- Other real estate disposals are generally subject to a 0% fee, except where otherwise provided under the Regulations.
- Transactions subject to the 0% fee include:
- Division of an estate;
- Final court judgments
- Expropriation for public interest; and
- Certain transfers made without consideration to an endowment or a public legal person.
Requirements
The Regulations also establish the procedural requirements for foreign ownership of real estate.
Before acquiring real estate in Saudi Arabia, a non-resident non-Saudi individual must:
- Obtain a Ministry of Interior-approved digital identity;
- Open a Saudi bank account in their name; and
- Obtain a Saudi contact number linked to the digital identity.
The Takeaway
Foreign investors and property owners should consider the new 2% disposal fee and ensure compliance with the prescribed ownership requirements when acquiring or disposing of real estate in the designated cities.
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