Saudi Arabia Welcomes Foreign Real Estate Investors with New Ownership Law

Saudi Arabia has implemented a new legal framework allowing foreigners to own real estate in the Kingdom from January 2026. This marks a significant shift in property ownership rules for non-Saudis, opening up residential, commercial, industrial, and agricultural property ownership to foreign investors under specific conditions, while maintaining restrictions in certain cities.

The reform, announced earlier by Minister of Municipalities and Housing Majed Al-Hogail, is now in effect and sets clear limits on where and how non-Saudis can own property. Residential ownership is permitted in most Saudi cities, with four exceptions: Makkah, Madinah, Jeddah, and Riyadh.

Under the new law, foreign residents living in Saudi Arabia can own one residential property outside designated ownership zones, excluding Makkah and Madinah. Ownership in the two holy cities remains restricted to Muslims only. Non-resident foreigners are allowed to own residential property only in areas specifically approved by the authorities. These designated zones will be determined by the Council of Ministers based on recommendations from the Real Estate General Authority and approval from the Council of Economic and Development Affairs.

For commercial, industrial, and agricultural properties, the law allows foreign ownership in all cities without exception. This applies to both individuals and companies, signaling broader access for foreign investment and business activity. Non-listed companies with foreign ownership may own property within approved zones, including in Makkah and Madinah, if they are established under Saudi company law. They may also own property outside those zones for business operations or employee housing, as defined by regulations.

Listed companies, investment funds, and special-purpose entities are permitted to own property across the Kingdom, including the holy cities. Their ownership is subject to controls issued by the Capital Market Authority in coordination with the Real Estate General Authority and other regulators.

The law makes registration mandatory for all non-Saudi individuals and entities. Property ownership is legally recognized only after registration in the Real Estate Registry. Foreign property transactions are subject to a fee of up to 5% of the property value, with detailed terms set out in the executive regulations. The system clarifies that foreign ownership does not grant rights beyond those defined by law and does not affect benefits under other frameworks such as the Premium Residency Program or GCC agreements.

Violations of the law can result in warnings or fines. Submitting false information may lead to fines of up to SR10 million, and in certain cases, courts may order the sale of the property.