Saudi Arabia: Overview
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In Depth
- Overview
- Taxes and Costs
- Tax on Rent (Example)
- Buying Guide
- Inheritance
- Living There
- Country Statistics
Directory
Global Statistics
Regional Statistics
- Rental Income Tax
- Capital Gains Tax
- GDP Per Capita
- GDP/Cap Growth 1 yr
- GDP/Cap Growth 5 yrs
- Economic Freedom
- Ec. Freedom 5 yrs
- Competitiveness
- Property Rights Index
- Currency +/- Value
Even Saudi Arabia is opening up
The post 9-11 oil boom has brought real zip into Saudi Arabia's economy, with enormous extra amounts of money sloshing around.
Yet mindful of the lessons of the post-1973 oil boom, the Saudis are spending their money cautiously this time. The Saudis have realized that they must change, and are encouraging foreign investment and developing the non-oil sector.
After deep recession in the 1990s, a Foreign Investment Law was passed in April 2000 to encourage a service-oriented economy. It relaxed visa procedures for tourists, and encouraged direct foreign investment.
Seven months later a new Real Estate Law allowed legally-resident non-Saudis to own real estate for their private residence, provided they get a license from the Ministry of Interior.
The law also allows ownership of real estate by foreign investors in order to conduct their business activities, and for the accommodation of their employees, again with permission from the Ministry of Interior. To prevent speculation, five years must elapse before property can be sold.
Foreigners are allowed to own real estate, subject to approval of the licensing authority.
However, foreign ownership is forbidden in Mecca and Medina, except through inheritance.
Non-Saudi Muslims are can obtain leases of up to two years in these cities. Leases are renewable for the same period.
RENTAL YIELDS
Yields - a mystery in Saudi Arabia
Research is ongoing.
TAXES AND COSTS
Income tax is low in Saudi Arabia
Effective Tax Rate on Rental Income |
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| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | nil | nil | nil |
| Click here to see a worked example | |||
Source:
Disclaimer |
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Rental Income: Rental income is taxed at a flat rate of 5%.
Capital Gains: No tax is levied on capital gains from property sales.
Inheritance: As in most countries in the Arab world, Shariah law applies to inheritance.
Residents: Non-Saudi individuals, companies and non-resident persons are taxed at 20% on a non-oil business activities in Saudi Arabia.
BUYING GUIDE
Total transaction costs in Saudi Arabia
Foreigners are allowed to own real estate, subject to approval of the licensing authority.
LANDLORD AND TENANT
Tenancy laws
Research is ongoing.
ECONOMIC GROWTH
9/11 dramatically boosted growth
"The Kingdom of Saudi Arabia (pop 25.6 million) was formally established in 1932 by Abdul Aziz ibn Saud, unifying the dual kingdom of the Hejaz and Najd, administered since 1927 as two separate units. It has the biggest economy and one of the highest GDP per capita (US$14,618) in the Middle East. It has more than 25% of the world’s known oil reserves.
King Abdullah Bin-Abd-al-Aziz Al Saud has been the effective ruler since the former king suffered a stroke in the mid-1990s. He is seen as a moderate reformist.
Saudi’s economic performance over the past 25 years has been very poor, largely due to mistakes. Average per capita incomes are today 30% below 25 years ago. But during the past five years there has been respectable economic growth.
Municipal elections in 2005 were a first limited exercise in democracy.
Political parties remain banned - the opposition is organised from outside the country - and activists who demand reform risk being jailed. Saudi Arabia has a tightly-controlled media and criticism of the government and royal family are not tolerated.
RESIDENTIAL PROPERTY AROUND THE WORLD
Asia & Pacific
Bubble fears prompt foreign ownership limits in China
America & Caribbean
The slowdown of the U.S. housing market
Middle East and Africa
Bahrain is open to foreigners and sizzling hot
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| RESIDENTIAL PROPERTY FACTS | |
| Price (sq.m): n.a. | Rental Yield: n.a. |
| Rent/month: n.a. | Income Tax: 0.0 Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income. |
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Roundtrip Cost:
n.a.
The total cost of buying and then reselling an apartment. Includes: * all transaction taxes and charges: * lawyers' and notaries' fees * agents' fees Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000. |
Cap Gains Tax: 0.0 Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation. |
| Landlord & Tenant Law: n.a. Rating is based on a detailed study of each country’s law and practice. | |
APRIL 2008
- Real Estate Prices Rise Up to 90% in Riyadh - Arab News
FEBRUARY 2008
- Emaar's Saudi affiliate posts profit on investments - Reuters
- Prince Al Waleed to invite bids for mile-high tower - A
- Saudi mortgage law nearly ready - Gulf News
JANUARY 2008
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