Foreign Ownership of Real Estate in Saudi Arabia: A New Chapter
Saudi Arabia has introduced a new legal framework to regulate foreign ownership of real estate. The initiative aligns with the country's Vision 2030 goals of attracting foreign investment, boosting the economy, and improving housing supply without compromising citizens' rights or market balance.
Why Real Estate Matters
The real estate sector supports over 120 industries and plays a key role in housing, employment, and urban growth. By opening this sector to international investors under clear regulations, Saudi Arabia seeks to diversify its economy and increase the sector’s contribution to GDP.
What’s New in the Law?
Effective January 2026, the updated Real Estate Ownership System for Non-Saudis replaces the 2000 law. It defines who can own property, where, and under what conditions. A supporting executive bylaw will provide further detail.
Key Highlights
- Applies to foreign individuals, companies, and non-profits.
- Ownership zones are defined by the Cabinet and published by the General Real Estate Authority (GREA).
- Makkah and Madinah remain restricted to Muslim ownership under specific rules.
- All properties must be registered in the Real Estate Registry.
- Violations may result in fines up to SAR 10 million.
Economic and Social Impact
- Increased Housing Supply: Helps meet demand and stabilize prices.
- Higher Quality Standards: Attracts global developers and services.
- Job Creation: Supports growth in construction, brokerage, legal, and engineering sectors.
- Inclusive Growth: Encourages balanced development across cities and regions.
System Principles
- Sovereignty: Ownership rights are regulated by the government to serve national goals.
- Transparency: Full registration and data accuracy are required, with penalties for violations.
- Citizen Priority: Saudi citizens’ housing needs remain a top priority.
- Rights Protection: Clear legal protections and dispute resolution mechanisms.
- Governance: Oversight by 13 government entities ensures compliance and system efficiency.
Who Can Own Property?
The law allows ownership by:
- Foreign individuals (residents and non-residents)
- Foreign companies and non-profits
- International organizations and embassies (with approval)
- Saudi companies with foreign shareholders
- Special investment vehicles or funds with foreign capital
Ownership Options
Ownership can take different legal forms, including:
- Full ownership (title deed)
- Usufruct rights (right of use)
- Easement rights
Fees and Penalties
- 10% total transaction cost (tax + foreign ownership fee)
- Fines up to SAR 10 million for false declarations or violations
- Properties obtained illegally may be sold in a public auction
Implementation and Supervision
The law is overseen by a 13-member committee including the General Real Estate Authority, Ministry of Investment, Ministry of Justice, and others. It will come into effect 180 days after being published.
This update reflects Saudi Arabia’s commitment to transparency, investment growth, and balanced real estate development for the benefit of both citizens and investors.
