This Saudi Arabia rent vs buy calculator answers the question every household in the Kingdom asks: over the years you actually plan to stay, does buying build more wealth than renting and investing the difference? It bakes in the things that make Saudi Arabia distinctive — the 5% Real Estate Transaction Tax, Sharia-compliant home finance, and the absence of any annual property or personal income tax.
How it works
The calculator runs two parallel scenarios over your time horizon.
Buying starts with the down payment plus acquisition costs — the 5% Real Estate Transaction Tax plus about 1% registration and agency. It amortises the home finance over your chosen term, accrues the profit charge, and pays annual holding costs (maintenance plus service and insurance, roughly 1.5% of value a year — there is no annual property tax on a primary home). At the horizon it sells at the appreciated value, deducts about 2.5% selling costs and the remaining finance balance, leaving your equity.
Renting invests the cash you did not tie up in a down payment and acquisition costs, then each month invests the difference between the owner’s total outflow and the rent, compounding at your chosen investment return. Rent grows each year. The end balance is the renter’s net worth.
The tool reports both figures and the winner.
Example
Buy a SAR 1,200,000 apartment in Riyadh with a SAR 180,000 down payment at a 6% finance profit rate over 25 years, staying 10 years, versus renting the same place for SAR 5,000/month. With 3% appreciation and a 5% investment return, the SAR 72,000 acquisition cost weighs on the early years, but a decade of appreciation and equity build often tips the result toward buying. Lower the appreciation and renting and investing can pull ahead.
Notes
This is a simplified model: it assumes you sell at the horizon, ignores investment-gain tax, and treats rates as fixed. Its real value is showing what drives the decision — the 5% entry tax, how long you stay, and the gap between appreciation and investment returns.