Saudi Arabia Release New Real Estate Laws For Foreign Investors

ISLAMABAD: In a major policy shift, Saudi Arabia has released the full text of a landmark law that allows non-Saudis to own and benefit from real estate within the Kingdom, according to the Saudi Gazette. This new legislation, approved by the Cabinet earlier this month, was officially published in the Umm Al-Qura Gazette and is set to take effect 180 days from the publication date.

The updated law enables non-Saudi individuals, businesses, and non-profit organizations to acquire ownership and real estate rights—such as usufruct and long-term leases—in specified areas across the country. These zones will be defined by the Council of Ministers. However, ownership will be regulated based on property type, intended use, and location.

While foreign ownership is now more widely permitted, the law continues to restrict property ownership in Makkah and Madinah. Exceptions apply only to individual Muslim owners under strict conditions. In a related move, the previous ban on ownership by Gulf Cooperation Council (GCC) nationals in these cities has been lifted, streamlining foreign ownership under a unified legal framework.

Read more: Pakistan to launch new remote sensing satellite from China

The Council of Ministers, in collaboration with the Real Estate General Authority and the Council of Economic and Development Affairs, will oversee the implementation of this policy. The Council is tasked with identifying zones eligible for foreign ownership, setting limits on ownership percentages, and establishing timeframes for usufruct rights.

Foreign residents legally living in Saudi Arabia will be allowed to purchase one residential property for personal use, provided the property is not located in restricted areas like Makkah and Madinah.

The law also opens up ownership rights for private companies with foreign shareholders, licensed investment funds, and special-purpose vehicles. These entities can acquire property across the Kingdom—including in the holy cities—if the real estate is used for operational needs or employee housing. Publicly listed companies and funds can invest in real estate, subject to Capital Market Authority regulations.

Diplomatic missions and international organizations will be permitted to own property for official functions and accommodation, provided the Saudi Ministry of Foreign Affairs approves and reciprocal agreements exist with the respective foreign governments.

All foreign entities must register with the relevant authorities before acquiring property. Legal ownership or usufruct rights will only be recognized upon registration with the national real estate registry. A transfer fee of up to 5% will be applied to transactions involving non-Saudis.

The law outlines strict penalties for non-compliance. Violations can lead to fines of up to SAR 10 million. In cases involving fraudulent information, authorities may force the sale of the property, with proceeds transferred to the state after deductions. A specialized committee under the Real Estate General Authority will handle violations, and appeals can be made to administrative courts within 60 days.

This new legislation replaces the 2000 Royal Decree No. M/15, which previously governed foreign real estate ownership. Executive regulations to clarify implementation procedures and geographic restrictions are expected to be issued within six months.