Saudi Gazette report

RIYADH — Saudi Arabia will begin implementing an updated legal framework governing non-Saudi ownership of real estate starting January 2026, marking a major shift in how foreigners can own property and acquire real estate rights across the Kingdom.

Minister of Municipalities and Housing Majed Al-Hogail said the new system will open residential property ownership to foreigners in most Saudi cities, with exceptions for four cities: Makkah, Madinah, Jeddah, and Riyadh.

Under the updated rules, foreign residents will be allowed to own one residential unit, while ownership by non-residents will be permitted only in designated areas approved by authorities.

Where foreigners can and cannot own property

According to Al-Hogail, residential ownership by foreigners will be allowed nationwide, except in the four excluded cities, though specific zones may later be designated for ownership by non-residents.

For commercial, industrial, and agricultural properties, ownership will be open to foreigners in all cities without exception, signaling broader access for investment and business activity.

Clear legal framework and defined limits

The updated system aims to regulate foreign real estate ownership by setting clear geographic boundaries, ownership limits, and legal controls.

Non-Saudis will be permitted to own property or acquire real rights only within areas designated 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 define the types of real rights allowed, maximum ownership ratios, and related conditions.

Residential ownership for foreign residents

The law allows non-Saudi natural persons residing in the Kingdom to own one residential property outside the designated ownership zones, excluding Makkah and Madinah. Ownership in those two holy cities remains restricted to Muslims only.

Rules for companies and investment entities

Non-listed companies with foreign ownership may own property within the approved geographic zones, including Makkah and Madinah, provided 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 will be allowed to own property across the Kingdom, including the holy cities, subject to controls issued by the Capital Market Authority in coordination with the Real Estate General Authority and other regulators.

Fees, registration, and penalties

The system emphasizes that foreign ownership does not grant additional privileges beyond those defined by law and does not affect rights granted under other frameworks such as the Premium Residency Program or GCC agreements.

All non-Saudi individuals and entities must register with the relevant authorities, and property ownership will be legally recognized only after registration in the Real Estate Registry.

A transaction fee of up to 5% of the property value will apply to foreign ownership, with details to be specified in the executive regulations.

Violations may result in fines or warnings, while submitting false information can lead to fines of up to SR10 million, and in some cases, court-ordered sale of the property.