Saudi Arabia is embarking on a significant regulatory shift with the introduction of a new law governing property ownership by foreigners. According to an official document reviewed by Okaz, this updated system is scheduled to take effect in January 2026. The move is designed to establish clear rules for non-Saudi investors, covering registration, ownership categories, and financial obligations, while leaving some specifics to be detailed later by the Real Estate General Authority (REGA).
Who Can Own Property and Key Regulations
The new framework opens up real estate investment to several defined groups. Non-Saudi individuals and companies are eligible, as are Saudi companies that have foreign shareholders. Non-profit entities and diplomatic missions are also included in the list of permitted owners. A cornerstone of the law is the mandate that all properties owned by foreigners must be registered, with full disclosure of all relevant data to ensure transparency and compliance with national goals.
However, special restrictions apply to the holy cities. In Mecca and Medina, only Muslims and Saudi companies will be allowed to own property or hold usufruct rights within specific zones, the details of which will be outlined in a forthcoming geographical document.
Financial Obligations and Oversight
Owning property in Saudi Arabia as a foreigner will come with specific financial responsibilities. The law stipulates a combined fee and tax of 10%, which includes the real estate transaction tax and administrative charges. To enforce compliance, the law introduces stringent penalties. Violations can lead to fines as high as 10 million Saudi Riyals. Furthermore, any property acquired using false or misleading information will be subject to a public auction.
The implementation will be a coordinated effort, involving 13 government agencies. An advisory committee will be established to monitor the law's progress, provide performance reports, and suggest necessary adjustments. This new system is designed to integrate with existing frameworks like the Premium Residency System and GCC property ownership rules.
Economic Vision and Future Impact
The revision of the foreign ownership system is a strategic step aligned with Saudi Arabia's Vision 2030. The primary objectives are to stimulate investment in the real estate sector, which supports over 120 economic activities, and to enhance housing availability while creating job opportunities. The law aims to promote fair and balanced investment, maintain market stability, and ensure that citizens retain access to property. By benchmarking against international best practices, including those of G20 nations, Saudi Arabia seeks to ensure that foreign ownership contributes to sustainable urban growth, economic diversification, and an improved quality of life in its cities.
The final piece of the puzzle—the specific geographical zones where non-Saudis can buy property, along with permitted ownership percentages and grace periods—is expected to be published by REGA in the near future, providing complete clarity for potential international investors.
