Saudi Arabia has enacted a new property ownership law allowing foreigners to own real estate in the Kingdom starting January 2026, representing a major change to long-standing restrictions on non-Saudi ownership. The legislation enables foreign ownership of residential, commercial, industrial, and agricultural properties under specific conditions, while maintaining limits in certain locations.
The reform, previously announced by Minister of Municipalities and Housing Majed Al-Hogail, is now in force and clearly defines where and how non-Saudis may acquire property. Residential ownership is generally permitted across the Kingdom, with exceptions for four cities: Makkah, Madinah, Jeddah, and Riyadh.
Areas where residential ownership is permitted
Under the new framework, foreign residents in Saudi Arabia are allowed to own one residential property outside designated ownership zones, excluding Makkah and Madinah. Ownership in the two holy cities remains restricted exclusively to Muslims.
Non-resident foreigners may purchase residential property only within areas specifically designated by the authorities. These zones will be determined by the Council of Ministers, based on proposals from the Real Estate General Authority and approval by the Council of Economic and Development Affairs.
Rules for commercial and investment properties
The law allows foreigners to own commercial, industrial, and agricultural properties in all Saudi cities without exception. This provision applies to both individuals and companies, reflecting a broader push to attract foreign investment and support business activity.
Non-listed companies with foreign ownership may acquire property within approved zones, including in Makkah and Madinah, provided they are established under Saudi company law. They are also permitted to own property outside those zones for operational purposes or employee accommodation, in line with regulatory guidelines.
Listed companies, investment funds, and special-purpose entities are allowed to own property throughout the Kingdom, including in the holy cities. Such ownership is subject to regulations issued by the Capital Market Authority in coordination with the Real Estate General Authority and other relevant bodies.
Registration requirements, fees, and penalties
All non-Saudi individuals and entities are required to register their property holdings, with ownership legally recognised only after registration in the Real Estate Registry.
Foreign property transactions may be subject to a fee of up to 5% of the property’s value, with specific terms outlined in the executive regulations. The law clarifies that foreign ownership does not confer rights beyond those explicitly stated and does not alter benefits under other frameworks, such as the Premium Residency Program or GCC agreements.
Non-compliance may result in warnings or financial penalties. Providing false information can lead to fines of up to SR10 million, and in certain cases, courts may order the property to be sold.
