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Saudi Arabia’s foreign property ownership milestone

9 April 2026

Saudi Arabia’s Real Estate Ownership Law, which came into force in January 2026, represents a significant and long-anticipated development in the kingdom’s approach to foreign ownership of real estate.

It forms part of a broader evolution of the regulatory framework governing the sector, aimed at enhancing transparency, strengthening investor confidence, and supporting long-term market development in line with Vision 2030.

As the framework begins to be implemented, market participants are increasingly focused on how these provisions will operate in practice and the implications for structuring real estate investments in the kingdom.

Under the previous legislative framework, introduced in 2000, foreign ownership of Saudi property was more restricted. Ownership was generally limited to individuals or entities authorised to carry out professional or commercial activities in the kingdom, with property rights closely linked to those activities rather than broader investment or personal use.

The law builds on this position by expanding both the categories of eligible owners and the scope of permitted real estate rights.

The new law applies a broad definition of “non-Saudi”, encompassing foreign individuals, companies, non-profit organisations and other legal entities, within a structured and regulated framework.

Expanding ownership rights

Non-Saudi individuals, whether resident in the kingdom or abroad, may own real estate or acquire real property rights within designated geographical areas, as provided for under the implementing regulations.

The law permits both ownership and the acquisition of other real property rights in accordance with applicable laws and regulations. In practice, this provides a clearer basis for foreign investors to assess how real estate interests may be structured within the kingdom.

Non-Saudi residents are also permitted to own one residential property outside those designated areas. This does not extend to cities of religious significance, including Mecca and Medina, except where permitted under the applicable legal and regulatory framework.

Foreign-owned Saudi companies may own real estate and acquire other real property rights necessary to conduct their licensed activities and to provide housing for employees, both within and outside designated geographical areas. This may, subject to applicable regulatory conditions, extend to properties in Mecca and Medina.

While ownership in the holy cities remains subject to specific regulatory controls, the new law provides a more clearly defined framework under which foreign participation may be permitted in accordance with applicable requirements.  

With respect to publicly listed companies, Saudi firms with foreign ownership listed on the Saudi Stock Exchange (Tadawul), as well as investment funds and special purpose entities, may own and acquire real property rights in the kingdom, including in Mecca and Medina, subject to compliance with the relevant regulatory framework.

Registration, compliance and transactional framework

The new Real Estate Ownership law introduces a structured compliance framework for foreign investors. It provides that all non-Saudis, whether corporations or individuals, are required to comply with applicable registration requirements with the competent authorities prior to owning real estate or acquiring other real property rights in the kingdom.

The implementing framework sets out procedures that vary depending on the type of investor. For example:

  • Non-resident individuals are required to obtain a valid digital identity profile through the Ministry of Interior’s “Absher” platform, open a Saudi bank account, and obtain a Saudi contact number.
  • Foreign companies are required to register with the Ministry of Investment, ensure that their legal representatives hold valid identification issued in accordance with the kingdom’s regulations, disclose their ownership structures, and open a Saudi bank account.

Ownership of real estate and the acquisition of related property rights will only be legally recognised once registration has been completed with the Real Estate Register in accordance with the applicable legal provisions. This reinforces transparency and legal certainty within the market.  

The law also regulates the disposal of property interests. Where a non-Saudi sells, transfers or otherwise disposes of a real property right, a disposal fee capped at 5% of the transaction value is payable to the Real Estate General Authority. This fee applies in addition to any other taxes or charges. The applicable rate may vary depending on the type, purpose and location of the property right, as set out in the relevant regulations.

Investors should also be aware of the law’s tiered penalty regime. Depending on the nature of the violation, penalties may range from a warning to fines capped at SR10m, with multiple penalties potentially applied for separate breaches.

The law reflects the kingdom’s continued focus on enhancing the regulatory environment for real estate, within a structure designed to balance market access with appropriate regulatory oversight. For investors and developers, the practical significance of the law lies in the clarity it provides on how foreign ownership can be structured and implemented. In particular, requirements relating to registration, ownership eligibility and permitted use will be key considerations when assessing transactions and investment structures.

As the implementing framework continues to develop, further detail, particularly in relation to designated geographical areas and the application of ownership rules in specific locations, will be important in shaping how the framework operates in practice.

More broadly, the law forms part of a wider programme of reforms aimed at supporting the sustainable development of Saudi Arabia’s real estate market and reinforcing its long-term attractiveness for investment, in line with the objectives of Vision 2030.

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