Saudi Arabia is preparing to enforce a major legal reform that will transform how foreigners can own property inside the Kingdom. The new Law of Real Estate Ownership by Non-Saudis, approved in July 2025, will officially take effect in January 2026, marking a significant step toward modernizing the real estate sector under the broader national Vision 2030 program.
The law has been developed and will be implemented under the supervision of the Real Estate General Authority (REGA), which is responsible for regulating and monitoring all property ownership and investment activities involving non-Saudis.
The purpose of this reform is to strike a balance between opening the Saudi real estate market to international investors and maintaining strict control to protect national interests, social values, and urban planning priorities. Authorities have emphasized that the move is not merely to attract capital, but to create a transparent, traceable, and accountable property ownership environment that aligns with anti-money-laundering and financial integrity laws. Every foreign buyer, whether an individual or a corporate entity, will be required to disclose full personal, financial, and ownership data before a purchase is approved or recorded in the national registry.
According to the new legal framework, five main categories of non-Saudis will be eligible to acquire property in Saudi Arabia. These include individual foreign residents who wish to buy homes for personal use, foreign companies established abroad that need real estate for commercial or industrial purposes, Saudi-registered companies that include foreign shareholders, international non-profit organizations operating in the Kingdom, and diplomatic missions seeking property for embassies or consulates.
Each of these categories will operate under specific executive regulations to be issued by REGA before the law’s implementation date. These detailed regulations will define the process for approval, required documentation, property types allowed, and the limits of ownership rights.
One of the most distinctive aspects of this new system is the introduction of geographical zoning. Instead of allowing foreign ownership across all cities, the government will issue a zoning document that designates certain regions where non-Saudis can purchase or lease real estate. REGA has confirmed that this document will include major cities such as Riyadh, Jeddah, Makkah, and Madinah, along with several other governorates.
It will contain detailed maps showing which areas are open to foreign buyers, the percentage of ownership permitted, the categories of property rights—such as full ownership, leasehold, or usufruct—and the specific rules governing how long these rights may be held.
In the sensitive cities of Makkah and Madinah, ownership rights for non-Saudis will remain tightly restricted, though the new law introduces limited flexibility. Certain public companies with partial foreign ownership or licensed corporate entities will be permitted to acquire property for approved development projects under close regulatory supervision. These exceptions are carefully designed to encourage investment without compromising the sanctity and cultural significance of the holy sites.
Foreign individuals and companies will be able to acquire real estate for several purposes, including residential, commercial, industrial, or hospitality projects. Those living and working in Saudi Arabia will be allowed to buy property for personal residence, while foreign companies may invest in commercial buildings, warehouses, or service facilities.
The law also permits participation in tourism-related developments, such as hotels and resorts, within designated areas. However, all such acquisitions must comply with local building codes, municipal bylaws, environmental regulations, and national planning standards.
Under the new regime, property registration will be mandatory. Every ownership or transfer involving a non-Saudi must be recorded through REGA’s digital platforms and verified in the national property database. The system will integrate with existing government e-services like Absher and Najiz, allowing for seamless online transactions. Any unregistered or falsely declared property will be deemed illegal, and such violations will lead to strict penalties.
Financial obligations for non-Saudis have also been clearly defined. A combined tax and fee structure of up to ten percent will apply to transactions involving foreign buyers, covering the real estate transaction tax and registration costs. Additional administrative or processing fees may be applied in certain cases, depending on the location and type of property. These measures are intended to generate government revenue while discouraging speculative property purchases that could destabilize local housing markets.
The penalty framework is equally strict. Violations of the law, including submitting false data, exceeding ownership limits, or acquiring property through misleading methods, can result in fines of up to ten million Saudi riyals. In the most serious cases, authorities have the power to confiscate and auction off such properties, with proceeds going to the state. These harsh penalties reflect the government’s determination to uphold integrity and prevent misuse of the new ownership privileges.
Economists and policy analysts believe this development will reshape Saudi Arabia’s real estate landscape over the next decade. Allowing controlled foreign participation could boost market liquidity, enhance transparency, and bring global expertise into Saudi construction, housing, and commercial development sectors. The move is aligned with Vision 2030’s National Investment Strategy, which aims to diversify the economy, increase non-oil revenue, and position Saudi cities—especially Riyadh and Jeddah—as global investment destinations.
The Real Estate General Authority has confirmed that all supporting executive regulations, maps, and application procedures will be released before January 2026. Once the system is operational, the Kingdom will, for the first time, offer a clear and legally secure path for foreigners to own real estate. This marks a historic transformation in a sector that was previously closed to most non-Saudis. Through this law, Saudi Arabia hopes to project a balanced image of openness and sovereignty—a country ready to welcome the world’s investors while maintaining firm control over its resources and cultural identity.