Saudi Arabia has officially released the full text of its new property ownership law for non-Saudis in the Umm Al-Qura official gazette, following recent Cabinet approval. The law, which replaces Royal Decree No. M/15 issued in 2000, will come into effect 180 days after publication, according to Saudi Gazette.
The updated legislation grants foreign individuals, companies, and non-profit organizations the right to own real estate or acquire other real rights—such as usufruct, leaseholds, and beneficial use—within specific geographic areas that will be determined by the Cabinet. These rights, however, are subject to various restrictions based on location, property type, and intended use.
Property ownership remains prohibited in Makkah and Madinah, except under special conditions for individual Muslim owners.
The law guarantees the protection of all legally established real estate rights for non-Saudis prior to its enforcement.
The Council of Ministers, based on recommendations from the Real Estate General Authority and the Council of Economic and Development Affairs, will be responsible for identifying permitted zones for foreign ownership and setting limits on ownership percentages and the duration of usufruct rights.
Among the provisions:
Foreign individuals legally residing in Saudi Arabia will be allowed to own one residential property for personal use, provided it is outside restricted areas.
Non-listed companies, including those with foreign shareholders, licensed investment funds, and special-purpose entities, will be permitted to acquire real estate across the Kingdom—including in Makkah and Madinah—if the property serves operational needs or employee housing.
Listed companies and investment vehicles may acquire property in accordance with Saudi financial market laws.
Diplomatic missions and international organizations may own premises for official use and residence, subject to Foreign Ministry approval and reciprocity conditions.
Non-Saudi individuals or entities must register with the appropriate authority before acquiring property. Ownership or other real rights will only be recognized upon formal registration in the national real estate registry.
A real estate transfer fee of up to 5% will apply to property transactions involving non-Saudis.
Violations of the law may incur penalties of up to SAR 10 million. In cases involving fraud or misinformation, properties may be confiscated and sold, with proceeds (after deductions) transferred to the state.
A special committee under the Real Estate General Authority will investigate violations and issue penalties. Its decisions may be appealed before the administrative courts within 60 days.
Importantly, the new law abolishes earlier restrictions that barred GCC citizens from owning property in Makkah and Madinah, unifying ownership rules for all non-Saudi entities under a single legal framework.
Executive regulations outlining implementation mechanisms, geographic boundaries, and specific ownership conditions are expected to be issued within the next six months.
Source: Arabian Business
