Broker commission in Saudi Arabia

Saudi Arabia is one of the few markets where the commission rate is written in the law itself. Article 14 of the Real Estate Brokerage Law sets it, and the implementing regulations explain how it is shared. Here is how it works, with numbers.

The short version

1. The default commission is 2.5% of the sale price, or 2.5% of the first year’s rent for a lease.
2. The parties can agree a different rate, but only in writing.
3. The client who signed the brokerage contract with you pays.
4. If you have contracts with both sides of the same deal, your total cannot exceed 2.5%.
5. Without a written split, both sides share it equally.
6. You earn it if the deal closes during the contract, or within two months after it ends, and you can prove you brokered it.

Who pays

The law is simple: the party who contracted with the broker pays. If you only signed the seller, the seller pays. If you only signed the buyer, the buyer pays. That is why a written, deposited brokerage contract matters so much. Without it, you cannot enforce your fee at all.

One broker, both sides

When one broker signs with both the buyer and the seller, the total commission is capped at 2.5%. The regulations then say:

• One contract with several parties: the commission is split equally, unless they agree otherwise.
• Separate contracts where only one sets a rate: that rate applies, and the other party pays the rest, up to the 2.5% total.
• Separate contracts with no rate: the 2.5% is split equally between the parties.

Two brokers on one deal

A broker can work with other brokers on the same property, unless the contract forbids it. A broker-to-broker contract must disclose the related contracts. Its commission and duration cannot exceed those of the main contract. How the two offices then share the fee is up to them.

The down payment rule

• A down payment cannot exceed 5% of the deal value. Anything above that counts as an advance on the price.
• A payment is only a down payment if this is written.
• If the deal falls through and the seller or landlord keeps the down payment, the broker gets 25% of it, unless the brokerage contract says otherwise.
• You cannot hold a down payment as security for your fee.

VAT

Saudi Arabia’s standard VAT rate is 15%. Property sales themselves are exempt from VAT and pay the 5% Real Estate Transaction Tax instead. Brokerage is a service, and the law does not say whether the 2.5% includes VAT. Write in the contract whether VAT is included or added, and ask your agency’s accountant how it invoices.

Your split inside an agency

We did not find a reputable published source for typical agent splits in Saudi agencies. They depend on the firm, the role and whether you are salaried. Get your split, any targets and the payment timing in your employment contract.

Worked examples

Sale, one side. A villa sells for SAR 2,000,000. You signed only the seller at the default rate. Commission: 2,000,000 × 2.5% = SAR 50,000, paid by the seller.

Sale, both sides, one contract. Same villa, but one contract covers both buyer and seller with no rate set. Total: SAR 50,000, capped. Each side pays SAR 25,000.

Lease. An apartment rents for SAR 80,000 a year. Commission: 80,000 × 2.5% = SAR 2,000, based on the first year only.

Failed deal. A buyer pays a written down payment of SAR 100,000 (5% of SAR 2,000,000), then walks away, and the seller keeps it. Your share, if the contract is silent: 100,000 × 25% = SAR 25,000.

VAT added. If your agency adds 15% VAT on a SAR 50,000 fee, the client pays SAR 57,500. Agree this before signing.

This guide was checked on the date shown above. Always confirm on REGA’s platform. CloserPass is not affiliated with REGA.

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