I. Introduction
Saudi Arabia has published a law permitting non-Saudis—including individuals, companies and non-profits—to acquire real estate rights in government‑designated zones, effective 180 days after publication. The legislation maintains restrictions on property ownership in Makkah and Madinah, except for narrow exemptions. Key features include limits on residential purchases by foreign residents, detailed corporate ownership provisions, mandatory registration, transfer fees of up to 5%, and penalties including fines of up to SAR 10 million for violations. Executive regulations will be issued within six months to clarify implementation.
II. New Legal Framework
1. On July 25, 2025, the text of the new “Law of Real Estate Ownership and Investment by Non‑Saudis” was published in the Umm Al‑Qura Gazette and will come into effect in January 2026, after a 180‑day transition period. This law replaces the previous Royal Decree No. M/15 of 2000. Under the new framework, non‑Saudis may obtain real estate rights—ownership, usufruct, leaseholds or other defined entitlements—in zones designated by the Council of Ministers, coordinated with the Real Estate General Authority and Council of Economic and Development Affairs. Those areas are expected to include major urban and economic hubs such as Riyadh, Jeddah and the Eastern Province.
2. Foreign residents holding valid residence permits will be permitted to purchase one residential property for personal use, provided it lies outside restricted zones. The law eliminates previous distinctions between GCC nationals and other foreign investors, applying a unified system for all non‑Saudis.Corporate ownership is addressed as follows: unlisted foreign‑owned companies, licensed investment funds and purpose‑formed entities may acquire property anywhere in the Kingdom—including within Makkah and Madinah—provided the property is used for operational needs or employee housing. Listed entities regulated by the Capital Market Authority may also hold property under existing CMA rules.
In Makkah and Madinah, the law continues to prohibit general foreign ownership, except under strict conditions for Muslim individuals or corporate entities serving operational purposes. Listed companies may invest in property in those two cities via equity stakes capped at 49%, subject to regulatory oversight.
3. All non‑Saudi investors must register their ownership or real rights with the national real estate registry before the transaction becomes legally effective. A transfer fee of up to 5% applies, and non‑compliance may result in penalties of up to SAR 10 million or forced sale of the property, with proceeds going to the state. Violations will be adjudicated by a dedicated committee, with appeals available in administrative courts within 60 days.
Executive regulations detailing eligible zones, ownership caps and procedural requirements are slated for publication within 180 days, with draft consultation expected via official channels.
Saudi Vision 2030 policy, and major giga‑projects such as NEOM, the Red Sea Project, and Rua Al Madinah, provide the broader context for this reform, which aims to attract foreign investment, support non‑oil sector growth, and boost real estate development.
III. Conclusion
With this new law set to take effect in January 2026, international investors and developers should anticipate a fundamentally different regulatory landscape for property acquisition in Saudi Arabia. Although the changes open access to high‑value growth corridors—especially in Riyadh, Jeddah, and the Eastern Province—the continued limitations in Makkah and Madinah underscore the Kingdom’s intent to balance investment liberalization with religious and cultural preservation. The requirement for prior registration and the introduction of transfer fees and strict penalties require careful due diligence and structured transaction planning.
