Saudi Arabia publishes new law allowing foreigners to own property

RIYADH: Saudi Arabia has officially released the full details of its new real estate law allowing property ownership by foreigners, following Cabinet approval earlier this month.

The law was published on Friday in the Kingdom’s official gazette, Umm Al-Qura, and will take effect 180 days from the publication date.

According to a report by Saudi Gazette, the law represents a significant shift in the Kingdom’s approach to foreign ownership, permitting individuals, companies, and non-profit entities to own property or obtain other real estate rights within specific zones to be designated by the Cabinet.

Under the new framework, foreigners may acquire various real estate rights — including ownership, usufruct (the right to use and benefit from property), leaseholds, and other interests — subject to certain conditions based on location, property type, and intended use.

Restricted Areas and Conditions

The law explicitly prohibits ownership in specific regions, most notably Makkah and Madinah, except under limited conditions for individual Muslim owners. Foreign individuals legally residing in the Kingdom are allowed to own one residential property for personal use, provided it is outside restricted areas.

Corporate and Institutional Ownership

Provisions for corporate ownership are also included. Foreign-owned non-listed companies, investment funds, and licensed special-purpose entities may acquire real estate throughout the Saudi Arabia — including in Makkah and Madinah — if the purchase serves operational needs or provides employee housing.

Publicly listed companies and investment vehicles may purchase property in accordance with Saudi financial market regulations.

Additionally, diplomatic missions and international organizations can own premises for official use or representative housing, subject to Foreign Ministry approval and reciprocity agreements.

Regulatory Oversight and Penalties

The new law introduces a real estate transfer fee of up to 5% on transactions involving non-Saudis. A penalty framework is also outlined, including fines of up to SAR 10 million. In severe cases — such as providing false information — authorities may enforce a compulsory sale of the property, with proceeds remitted to the state after deductions.

Additionally, the law repeals a prior rule that prohibited GCC citizens from owning property in Makkah and Madinah, effectively standardizing rules for all non-Saudi entities under a single framework.