What it costs to buy in Makkah and Madinah

Real Estate Transaction Tax (RETT) is 5% of the transaction value under the RETT Law that took effect on 10 April 2025. The Zakat, Tax and Customs Authority (ZATCA) administers it, and its guideline states that under Article 7(1) of the RETT Law the seller, called the assignor, is the person who must pay the tax, and that an agreement for the buyer to bear it does not relieve the seller of that liability to ZATCA.

In practice, the same guideline says, the parties customarily agree that the buyer bears it, although the seller bears the tax by law. Expect a developer or seller in the holy cities to either price it in or ask you to pay it, and read the clause before you sign.

Timing matters too. ZATCA issues the invoice at 5% of the transfer value and the tax must be paid before the transfer is completed at the notary, even where the parties have agreed that the buyer pays it. The tax base is the value the parties agreed, provided it is not below the fair market value on the date of the transaction, so an unusually low declared price does not reduce the tax.

Two further points matter in the holy cities. Off-plan unit sales are taxable RETT transactions, with the tax due on or before the date the ownership transfer is notarised. Usufruct of up to 99 years also remains available as an alternative to ownership in Makkah and Madinah, and a usufruct right of more than 50 years is within the scope of RETT, calculated on the present value of the right or of the rent for the whole period, whichever is higher.

The non-Saudi ownership fee is set at 2% in Riyadh, Jeddah, Makkah and Madinah by Article 9 of the executive regulations, within a cap of 5% written into the law itself. The Real Estate General Authority (REGA) collects it.

Who bears it is settled in the contract, and on a purchase like this it is you. The regulation levies the fee on “the value of a non-Saudi’s disposition of real rights in property” and leaves the parties to allocate it. Budget the 2% as yours and write it into the contract; a clause that moves it to the seller is a bonus you should not count on.

There are zero-rated cases. They include estate division, court orders, donations to the state or a waqf, resale to the original owner within 180 days, co-owner partition, and developer unit sales within the licence period plus one year. Ask a developer about the last one directly, because the charge may not apply to a new unit bought inside the licence window.

The commission is 2.5% of the transaction value unless agreed otherwise in writing, and Article 14 of the Brokerage Law puts it on the party who engages the broker, which on a purchase like this is you. The cost calculator includes it in the total for that reason. Check the FAL licence of anyone you deal with, using REGA’s public broker inquiry service, which searches by licence number, contract number or ownership document number.

Buyers from countries with VAT on new homes often ask whether a new unit from a developer carries VAT. It does not. Since 4 October 2020, supplies of real estate that transfer ownership are exempt from VAT under Royal Order A/84, and the 5% Real Estate Transaction Tax applies to sales instead. RETT replaced VAT on property sales, so you pay one tax on the sale.

Title goes through the Real Estate Registry; unregistered deeds are looked up at the Ministry of Justice. We found no published registration fee, because the Registry site lists first registration, ownership transfer and title-document services but does not publish a fee schedule on its public pages. We therefore do not state a registration charge, and we suggest you ask the developer or your adviser what is charged at that step.

Valuation is similar. Valuations are carried out by valuers accredited by the Saudi Authority for Accredited Valuers (Taqeem), and we found no published fee scale for a report. For an ordinary purchase you may not need one; a Taqeem valuation is a requirement of the Premium Residency Real Estate Owner track, which needs residential property worth at least SAR 4 million, developed and free of mortgages.

Most new supply in the zones is sold off-plan under REGA’s Wafi programme, which changes when you pay and leaves the amount the same. A developer may not take more than 5% of the unit value as a reservation. A Wafi licence requires an escrow agreement with a licensed Saudi bank, and every reservation amount must go into that escrow account. Later payments are held in the same account and released to the developer according to construction progress, as assessed by the supervising engineering office.

Payment plans are agreed with each developer and are not published. The project pages of Retal’s Roya Al Haram in Masar and the Masar developers directory publish unit types and direct buyers to the portal or the developer for terms, deposits and prices. A Saudi property guide describes the usual shape as a 10% to 20% down payment with the balance over construction milestones. The paying-for-it guide goes deeper on this, and we will get you the current plan for any project on this site.

Regulations approved on 13 May 2026 introduce a vacant-property fee of up to 5% per year of value for buildings unused for six months or more, in zones to be announced. A building counts as vacant if unused for six months, consecutive or not, in the reference year; the zones are set by the Minister of Municipalities and Housing; cases where occupancy is impossible for reasons beyond the owner’s control are exempted; and the fee is payable within six months of the invoice, with a right to object. Whether your zone is caught is not yet known, so a buyer who plans to visit only for Umrah should watch this one.

We have no sourced figures for service charges, utilities or building insurance in any of the projects, so we do not print any. Ask the developer for its service-charge schedule in writing before you reserve.

The examples below apply the three rates above to round prices and assume the worst case for the buyer: the buyer bears the tax, the fee and a broker commission. Registration, valuation and service charges are left out because we cannot source them.

At SAR 1,000,000: RETT at 5% is SAR 50,000, the non-Saudi fee at 2% is SAR 20,000 and a broker at 2.5% is SAR 25,000, so the all-in cost is SAR 1,095,000 with a broker or SAR 1,070,000 without one.

At SAR 2,000,000: RETT at 5% is SAR 100,000, the non-Saudi fee at 2% is SAR 40,000 and a broker at 2.5% is SAR 50,000, so the all-in cost is SAR 2,190,000 with a broker or SAR 2,140,000 without one.

At SAR 4,000,000: RETT at 5% is SAR 200,000, the non-Saudi fee at 2% is SAR 80,000 and a broker at 2.5% is SAR 100,000, so the all-in cost is SAR 4,380,000 with a broker or SAR 4,280,000 without one.

If the seller bears RETT, as the law provides, subtract the 5% line from each total. If a developer confirms that the unit falls inside the zero-rated licence window, subtract the 2% line as well. For pounds, dollars, euros or ringgit, the cost calculator shows the same stack at indicative rates; we do not print conversions here because exchange rates move and the sources quote riyals.

Budget 9.5% on top of the price and you will not be surprised; budget 2% and you are relying on the seller paying the tax and on buying without a broker. The two questions to put to a developer before you reserve are whether the price includes RETT and whether the unit is within the zero-rated licence window for the non-Saudi fee. Get both answers in writing.

Then run the numbers in the cost calculator with the price you are quoted, and read the paying-for-it guide for how the money moves from your bank abroad to the escrow account in Saudi Arabia.

This is not legal advice. Rules change, and each fact above shows the date we last checked it. Speak to a licensed adviser before you commit money.