Utilities
Synonyms: Public Utilities، Utility Services، Building Services، Essential Services
Last updated: 2026-09-25
Short Definition
Utilities are the essential services supplied to a property from external networks to make it fit to live or work in, chiefly electricity, water, sewerage, telecommunications and internet, plus gas and waste collection.
Overview
Legal Basis
The Saudi Electricity Regulatory Authority (renamed in 2024 from the Water and Electricity Regulatory Authority) approves consumption tariffs: 18 halalas/kWh for residential use up to 6,000 kWh a month and 30 halalas above. Utility bills are subject to the VAT Law (Royal Decree No. M/113 dated 2/11/1438H) at the standard 15% rate. In leases, the Civil Transactions Law (M/191) obliges the landlord to deliver the property and its appurtenances in a condition allowing full use, and Ejar allows the financial liability for electricity and water meters to be transferred to the tenant.
Practical Example
A family renting a villa in Al-Qirawan, Riyadh, wants to estimate its annual electricity cost. In winter months consumption is about 1,200 kWh a month = SAR 216 before VAT. At the summer peak it reaches 7,000 kWh: the first 6,000 × 0.18 = SAR 1,080, and the remaining 1,000 × 0.30 = SAR 300, totalling SAR 1,380 before VAT. Adding 15% VAT, the peak bill is about SAR 1,587. On that basis the family negotiates with the owner before signing to service the air-conditioners and install roof thermal insulation, and agrees to transfer the electricity meter to its name through Ejar, recording the reading on handover day.
Common Mistakes
- ✗Assuming electricity and water are included in the rent without an express clause in the lease.
- ✗Estimating electricity costs from a winter bill, although summer bills can be several times higher due to air-conditioning.
- ✗Renting or buying a unit with a shared meter without a written agreement on how the bill is split.
- ✗Leaving out the 15% VAT when budgeting monthly utility costs.
- ✗Handing over a new unit before utilities are fully connected and working, although the landlord must deliver a property fit for full use.
International Differences
Utility pricing and delivery vary by country. In the UAE local authorities supply electricity and water together under tiered tariffs; in Turkey electricity and natural gas are delivered through distribution companies, with piped gas widespread in homes; in Egypt lower consumption brackets are subsidised; and in Europe prices vary widely and may be included in service charges. In Saudi Arabia utilities are characterised by a two-tier electricity tariff published by the regulator, the heavy impact of air-conditioning on bills, and the ability to link meter liability to the registered lease.
