Saudi Arabia introduces new law allowing foreigners to own property

Saudi Arabia has formally enacted a new law that opens up its real estate sector to foreign ownership, introducing a broader legal framework for property transactions involving non-Saudis. The law, published in the Umm Al-Qura Gazette on Friday and reported by Saudi Gazette, will come into effect 180 days from publication.

Approved by the Saudi Cabinet earlier this month, the legislation allows foreign individuals, companies, non-profit organisations, and investment entities to own or hold real rights over property across designated zones in the Kingdom. These rights include ownership, leaseholds, usufruct, and other real estate interests, but remain subject to restrictions based on location, property type, and usage.

Provisions for residents, companies, and diplomatic missions


Foreign individuals with legal residence in Saudi Arabia will be allowed to own a single residential property outside restricted areas for personal use. The law also grants property ownership rights to non-listed companies with foreign shareholders, licensed investment funds, and special-purpose vehicles, including for operational needs and employee housing, even within Makkah and Madinah, under regulated conditions.

Diplomatic missions and international organisations may own property for official use, subject to Ministry of Foreign Affairs approval and reciprocity with the country of origin.

Makkah and Madinah ownership conditions retained

While the law significantly expands foreign access to Saudi property markets, it maintains long-standing restrictions on ownership in Makkah and Madinah. As per Saudi Gazette, ownership in these cities will only be permitted under strict criteria for Muslim individuals. Notably, the new regulation lifts the previous ban on ownership in these areas by GCC nationals, applying a single regulatory framework to all non-Saudi stakeholders.

Zones, limits to be defined by Council

The Council of Ministers, working with the Real Estate General Authority and the Council of Economic and Development Affairs, will define geographical zones for foreign ownership. The Council will also establish ownership caps and time limits on usufruct rights, according to Saudi Gazette.

Registration, taxes, and enforcement

The law mandates registration with relevant authorities before any property transaction by non-Saudis. Legal validity of ownership or real rights will only be recognised after entry into the national real estate registry. A property transfer fee of up to 5% will apply to transactions involving foreign buyers.

Violations may attract fines of up to SAR 10 million. In cases involving falsified information, authorities may order the property’s forced sale, with proceeds going to the state. A dedicated enforcement committee under the Real Estate General Authority will investigate breaches, with the option to appeal decisions in administrative courts within 60 days.

Replaces 2000 Royal Decree

This law replaces Royal Decree No. M/15 issued in 2000. Executive regulations detailing operational procedures, location-specific rules, and technical guidelines are expected to be released within six months.