Saudi Arabia Introduces New Law on Foreign Property Ownership
Comprehensive overhaul grants non-Saudis real estate rights, with restrictions and controls.
Saudi Arabia has published a new law regulating the ownership of real estate by foreigners, marking a significant shift in the kingdom's approach to foreign property rights.
The legislation, released in the official gazette Umm Al-Qura on Friday, will take effect 180 days from publication and introduces a range of controls and restrictions based on location, property type, and usage.
Under the new system, non-Saudis, including individuals, companies, and non-profit entities, are granted the right to own property or obtain real rights such as usufruct (beneficial use) and leaseholds within designated geographic zones determined by the Cabinet.
The law also preserves existing real estate rights for non-Saudis established before its enforcement.
However, ownership remains prohibited in certain locations, notably Makkah and Madinah, except under specific conditions for individual Muslim owners.
A key provision allows the Council of Ministers, upon proposal from the Real Estate General Authority and approval by the Council of Economic and Development Affairs, to define allowable zones for foreign ownership and set limits on ownership percentages and durations.
Foreign individuals legally residing in Saudi Arabia are permitted to own one residential property outside restricted areas for personal housing purposes.
Non-listed companies with foreign shareholders, investment funds, and licensed special-purpose entities can also acquire real estate throughout the Kingdom, provided the ownership supports operational needs or employee housing.
Listed companies and investment vehicles may buy property in accordance with Saudi financial market rules.
Diplomatic missions and international organizations are authorized to own premises for official use and residence of their representatives, subject to Foreign Ministry approval and reciprocity conditions.
Non-Saudi entities must register with the competent authority before acquiring property, and ownership or real rights become valid only after formal registration in the national real estate registry.
The law introduces a real estate transfer fee up to 5% for transactions involving non-Saudis and outlines penalties for violations, including fines up to SR10 million and forced sale of the property with proceeds remitted to the state.
A dedicated committee under the Real Estate General Authority will investigate violations and impose penalties.
The previous rule prohibiting GCC citizens from owning property in Makkah and Madinah has been repealed, standardizing rules for all non-Saudi entities under a single framework.
The executive regulations detailing implementation mechanisms and specific geographic boundaries are expected within six months.
This new law replaces the foreign property ownership legislation issued in 2000 under Royal Decree No. M/15.
The legislation, released in the official gazette Umm Al-Qura on Friday, will take effect 180 days from publication and introduces a range of controls and restrictions based on location, property type, and usage.
Under the new system, non-Saudis, including individuals, companies, and non-profit entities, are granted the right to own property or obtain real rights such as usufruct (beneficial use) and leaseholds within designated geographic zones determined by the Cabinet.
The law also preserves existing real estate rights for non-Saudis established before its enforcement.
However, ownership remains prohibited in certain locations, notably Makkah and Madinah, except under specific conditions for individual Muslim owners.
A key provision allows the Council of Ministers, upon proposal from the Real Estate General Authority and approval by the Council of Economic and Development Affairs, to define allowable zones for foreign ownership and set limits on ownership percentages and durations.
Foreign individuals legally residing in Saudi Arabia are permitted to own one residential property outside restricted areas for personal housing purposes.
Non-listed companies with foreign shareholders, investment funds, and licensed special-purpose entities can also acquire real estate throughout the Kingdom, provided the ownership supports operational needs or employee housing.
Listed companies and investment vehicles may buy property in accordance with Saudi financial market rules.
Diplomatic missions and international organizations are authorized to own premises for official use and residence of their representatives, subject to Foreign Ministry approval and reciprocity conditions.
Non-Saudi entities must register with the competent authority before acquiring property, and ownership or real rights become valid only after formal registration in the national real estate registry.
The law introduces a real estate transfer fee up to 5% for transactions involving non-Saudis and outlines penalties for violations, including fines up to SR10 million and forced sale of the property with proceeds remitted to the state.
A dedicated committee under the Real Estate General Authority will investigate violations and impose penalties.
The previous rule prohibiting GCC citizens from owning property in Makkah and Madinah has been repealed, standardizing rules for all non-Saudi entities under a single framework.
The executive regulations detailing implementation mechanisms and specific geographic boundaries are expected within six months.
This new law replaces the foreign property ownership legislation issued in 2000 under Royal Decree No. M/15.
