Saudi Arabia publishes new law on foreign property ownership

Dubai: Saudi Arabia has published the full text of a sweeping new law regulating real estate ownership by non-Saudis, marking a significant shift in property regulations across the Kingdom, according to the Saudi Gazette.

The law, approved by the Cabinet earlier this month, was officially published in the Umm Al-Qura Gazette on Friday. It will come into force 180 days from publication.

The new law grants non-Saudis — including individuals, companies, and non-profit entities — the right to own or obtain real rights over real estate in designated zones, which will be defined by the Cabinet.

According to Saudi Gazette, these rights include ownership, usufruct (the right to use and benefit from property), leaseholds, and other real estate interests. However, ownership will remain subject to various restrictions based on location, property type, and intended usage.

While the new regulation broadens access to real estate, it maintains a clear prohibition on foreign ownership in certain areas — notably Makkah and Madinah — except under strict conditions for individual Muslim owners. The previous ban on property ownership in these cities for GCC nationals has also been lifted, bringing all non-Saudi entities under a single regulatory framework.

A central provision of the law tasks the Council of Ministers, in coordination with the Real Estate General Authority and with approval from the Council of Economic and Development Affairs, with determining the geographical zones where foreign ownership will be permitted.

The Council will also establish caps on ownership percentages and time limits for usufruct rights, Saudi Gazette reported.

Foreign individuals legally residing in Saudi Arabia will be allowed to own a single residential property for personal use, provided it is located outside restricted zones. Makkah and Madinah remain excluded from this provision.

In terms of corporate ownership, the law allows non-listed companies with foreign shareholders, as well as licensed investment funds and special-purpose entities, to own real estate throughout the Kingdom — including in the holy cities — if the property serves operational purposes or employee housing.

Listed companies and investment vehicles can also acquire property, provided they comply with existing Saudi Capital Market Authority regulations.

Diplomatic missions and international organisations will be permitted to own property for official functions and housing of representatives, subject to approval by the Ministry of Foreign Affairs and reciprocity conditions with the respective countries.

The new framework mandates all non-Saudi entities to register with the relevant authority before acquiring property. Ownership or usufruct rights will only become legally valid after registration in the national real estate registry.

A real estate transfer fee of up to 5% will apply to property transactions involving non-Saudis, Saudi Gazette confirmed.

The law introduces a strict enforcement regime. Violations may result in fines of up to SR10 million. In cases involving falsified information, authorities may order the forced sale of the property, with proceeds going to the state after deductions.

A dedicated committee under the Real Estate General Authority will investigate breaches and impose penalties. Committee decisions may be appealed before the administrative courts within 60 days.

The newly announced law repeals Royal Decree No. M/15 of 2000, which previously governed foreign ownership. Executive regulations detailing implementation, geographic boundaries, and specific conditions are expected within six months.