Saudi Gazette report

RIYADH — Saudi Arabia has officially published the full details of its new law regulating real estate ownership by non-Saudis, following Cabinet approval earlier this month.

The comprehensive law, released in the official gazette Umm Al-Qura on Friday, will take effect 180 days from publication and marks a major overhaul in the Kingdom’s approach to foreign ownership of property.

The new system grants non-Saudis — including individuals, companies, and non-profit entities — the right to own property or obtain other real rights over real estate within designated geographic zones to be determined by the Cabinet.

These rights include usufruct (beneficial use), leaseholds, and other real estate interests, but will be subject to a range of controls and restrictions based on location, property type, and usage.

The law preserves all real estate rights that were legally established for non-Saudis prior to the new regulation taking effect.

However, it clearly states that ownership remains prohibited in certain locations and regions, notably in Makkah and Madinah, except under conditions for individual Muslim owners.

A key provision in the law requires the Council of Ministers — upon a proposal by the Real Estate General Authority and with the approval of the Council of Economic and Development Affairs — to define the allowable zones for foreign ownership and set upper limits on ownership percentages and durations for usufruct rights.

Foreign individuals legally residing in Saudi Arabia may own one residential property outside restricted areas for personal housing purposes. This does not apply to Makkah and Madinah.

The regulation also includes provisions for corporate ownership. Non-listed companies with foreign shareholders, as well as investment funds and licensed special-purpose entities, will be permitted to acquire real estate throughout the Kingdom, including in Makkah and Madinah, provided the ownership supports operational needs or employee housing.

Listed companies and investment vehicles may also acquire property in line with Saudi financial market regulations.

Diplomatic missions and international organizations can also own premises for official use and residence of their representatives, subject to Foreign Ministry approval and reciprocity conditions.

To ensure compliance, non-Saudi entities must register with the competent authority before acquiring property.

Ownership or real rights become valid only after formal registration in the national real estate registry.

The law introduces a real estate transfer fee of up to 5% for transactions involving non-Saudis, and outlines a penalty framework for violations.

Sanctions include fines up to SR10 million and, in severe cases such as falsified information, the forced sale of the property with proceeds remitted to the state after deductions.

A dedicated committee under the Real Estate General Authority will be formed to investigate violations and impose penalties. Decisions of this committee can be appealed to the administrative courts within 60 days.

Additionally, the law repeals a prior rule that prohibited GCC citizens from owning property in Makkah and Madinah, effectively standardizing rules for all non-Saudi entities under a single framework.

The executive regulations, which will detail implementation mechanisms and specify geographic boundaries and conditions, are expected to be issued within six months.

The new law replaces the previous foreign property ownership legislation issued under Royal Decree No. M/15 in 2000.