Saudi Arabia will implement a new legal framework allowing foreigners to own property starting January 2026, marking a major shift in real estate ownership rules across the Kingdom. The updated system aims to attract foreign investment while setting clear controls on ownership rights.

New Saudi Real Estate Law for Foreign Ownership

The announcement was made by Minister of Municipalities and Housing Majed Al-Hogail, who confirmed that the new law will regulate how non-Saudis can own real estate and exercise property rights throughout Saudi Arabia.

Under the new system, foreigners will be permitted to own residential property in most Saudi cities, with ownership restrictions remaining in four major cities:

• Makkah

• Madinah

• Jeddah

• Riyadh

Where Foreigners Can Own Property in Saudi Arabia

Residential Property Ownership Rules

According to the updated regulations:

• Foreign residents legally living in Saudi Arabia may own one residential property.

• This ownership is allowed outside designated foreign ownership zones, except in Makkah and Madinah.

• Residential ownership in Makkah and Madinah remains restricted to Muslims only.

• Non-residents may own residential property only in specific areas approved by authorities.

Residential ownership will generally be permitted across the Kingdom, except for Makkah, Madinah, Jeddah, and Riyadh. However, special zones for non-resident ownership may be approved in the future.

Commercial, Industrial, and Agricultural Property

All Saudi cities have removed limits on foreign ownership of commercial, industrial, and agricultural properties. This reform is intended to support economic diversification, business expansion, and increased foreign investment, similar to initiatives highlighted in Saudi Arabia’s broader investment reforms.

Clear Legal Controls and Ownership Limits

The new law introduces clear legal boundaries for foreign real estate ownership, including:

• Defined geographic zones where ownership is permitted
• Limits on ownership ratios
• Clearly stated legal rights and obligations

Foreigners may only own property in areas approved by the Council of Ministers, based on recommendations from the Real Estate General Authority and approval from the Council of Economic and Development Affairs.

These approvals will specify:

• Permitted types of real estate rights

• Maximum ownership limits

• Additional regulatory conditions

Rules for Foreign Residents

Outside approved ownership zones, non-Saudi residents legally living in the Kingdom may own one residential unit, excluding Makkah and Madinah. This maintains the long-standing rule that property ownership in the two holy cities is limited to Muslims.

Property Ownership Rules for Companies and Investors

Non-Listed Companies

Any legally established non-listed Saudi company with foreign ownership may own property within approved ownership zones, including Makkah and Madinah.

Such companies may also own property outside approved zones for business purposes or employee housing, as defined by executive regulations.

Listed Companies and Investment Funds

Executive regulations will allow listed companies, investment funds, and special-purpose entities to own property anywhere in Saudi Arabia, including Makkah and Madinah.

These activities will be regulated by the Capital Market Authority in coordination with the Real Estate General Authority and other regulators, aligning with Saudi capital market reforms.

Fees, Registration, and Penalties

The new system confirms that foreign property ownership does not grant additional privileges beyond those stated in the law. It also does not affect rights granted under other systems, including:

• Premium Residency Program

• GCC agreements

Foreign-owned properties must be registered in the Real Estate Registry to be legally valid. A transaction fee of up to 5% of the property value will apply, with exact rates defined in the executive regulations.

Penalties for Violations

• Warnings or financial fines for violations

• Fines of up to SR10 million for false or misleading information

• In severe cases, court-ordered sale of the property