Affordable Housing
Synonyms: Subsidised Housing، Supported Housing، Housing Support
Last updated: 2026-09-25
Short Definition
Affordable housing refers to housing solutions offered at prices or financing terms within reach of low- and middle-income households, with direct or indirect government support, so that they can own or rent a suitable home without its costs consuming a burdensome share of their income.
Overview
Legal Basis
Affordable housing rests on the Vision 2030 Housing Program delivered by the Ministry of Municipalities and Housing through the Sakani platform and the Real Estate Development Fund. Off-plan projects are regulated by the Law on the Sale and Lease of Off-Plan Real Estate Projects issued by Royal Decree No. (M/44) dated 10/3/1445H. The 5% Real Estate Transaction Tax is imposed under the RETT Law issued by Royal Decree No. (M/84) dated 19/3/1446H and its regulation in force since 10 April 2025, and the state bears the tax for a citizen buying a first home on up to SAR 1 million of value; this does not cover land, self-build or investment buildings.
Practical Example
An eligible Saudi family buys its first home, an existing flat in Al-Fursan, Riyadh, for SAR 950,000 with subsidised mortgage finance through the Real Estate Development Fund. The 5% Real Estate Transaction Tax is SAR 47,500, and because the value is below SAR 1 million the state bears the full tax once the first-home certificate is issued through Sakani. Had the price been SAR 1,200,000, the state would have borne only SAR 50,000, and the party liable for the tax would have paid the SAR 10,000 difference (5% × 200,000). Before signing, the family checks that the unit meets the support conditions and reviews the monthly instalment schedule relative to its income.
Common Mistakes
- ✗Confusing state-supported affordable housing with market budget property and assuming any cheap unit qualifies for support.
- ✗Assuming Real Estate Transaction Tax support covers any value, although it is capped at the first SAR 1 million of the first home's value.
- ✗Assuming the tax support extends to buying land, investment buildings or self-build.
- ✗Signing an off-plan purchase without checking the project licence, delivery schedule and protections under the off-plan sales law.
- ✗Committing to a mortgage instalment that consumes a burdensome share of income by relying on support alone without counting other costs.
International Differences
Countries follow different affordable housing models. In Turkey, the Housing Development Administration (TOKİ) builds social units sold on instalments; in Egypt, the state offers social housing units with subsidised finance; and in the UAE, citizens' housing programmes provide loans, grants and homes. The Saudi model is distinctive in combining a single digital platform (Sakani), developer partnerships in off-plan sales and the state bearing the first-home transaction tax.
