Short-Term Rental

A short-term rental is the letting of a residential unit, usually furnished, for a short period ranging from one night to a few weeks or months, to tourists, visitors, business travellers and people relocating temporarily, at a daily, weekly or monthly rate that is usually higher, pro rata, than annual rent. In Saudi Arabia, regulation depends on how the unit is used. Letting a private property unit to tourists for paid overnight stays makes it a ‘private hospitality unit’ governed by the Tourism Law issued by Royal Decree No. (M/18) dated 26/1/1444H and the Private Hospitality Unit Regulation published in the Umm Al-Qura Gazette on 11 September 2026 and in force from publication. It may not operate without a Ministry of Tourism licence valid for no more than one year; the applicant must be a Saudi national or a non-Saudi owner of the unit and provide an electronic title deed or proof of a right to use it for the whole licence period; the property must be residential, agricultural or mixed residential-commercial; the owners’ association bylaws and decisions in a jointly owned building must not bar or restrict daily letting; and a tourist’s stay may not exceed 29 consecutive days. Since 1 January 2025, booking platforms have been required not to list unlicensed facilities, with penalties of up to a SAR 1 million fine or closure of the facility. Such temporary stays are not residential real estate under the VAT regulations, so they are taxed at 15% when the operator is VAT-registered. Letting a unit for a few months to someone who makes it their home, by contrast, is a residential lease governed by the Civil Transactions Law and documented on Ejar. In practice, short-term rentals earn more in peak seasons and tourist cities but bring volatile occupancy and costs for operation, cleaning, furniture and platform commissions. A tenant who wants to re-let their flat by the night needs the owner's permission, because the Civil Transactions Law prohibits subletting without the landlord's consent.