Saudi Arabia’s New Law on Non-Saudis' Property Ownership: A Strategic Shift in Real Estate Policy



Saudi Arabia’s New Law on Non-Saudis' Property Ownership: A Strategic Shift in Real Estate Policy
Firoz Mohammed

On July 25, 2025, Saudi Arabia officially enacted the Non-Saudis Ownership of Property Law, marking a significant policy shift aimed at attracting foreign investment and diversifying the economy under Vision 2030. Set to take effect 180 days post-publication, this legislation introduces structured guidelines for non-Saudis—individuals, companies, and non-profit entities—to own and invest in real estate within designated zones across the Kingdom.

Key Provisions of the New Law

1. Ownership Rights and Geographic Restrictions
Non-Saudis are permitted to acquire real estate or other real rights, such as usufruct and leaseholds, within specific areas defined by the Council of Ministers. These zones will be determined in coordination with the Real Estate General Authority (REGA) and the Council of Economic and Development Affairs. Notably, the cities of Makkah and Medina remain largely off-limits to foreign ownership, with exceptions made only for Muslim individuals under strict conditions.

2. Residential Ownership for Foreign Residents
Foreign individuals legally residing in Saudi Arabia are allowed to own a single residential property for personal use, provided it is located outside the restricted zones of Makkah and Medina. This provision aims to accommodate expatriates seeking stable housing options within the Kingdom.

3. Corporate Ownership and Investment
The law facilitates property ownership for non-listed foreign companies, licensed investment funds, and special-purpose entities within the designated zones. These entities can acquire real estate necessary for their operations or to house employees. Publicly listed companies and investment vehicles are also permitted to invest in real estate, subject to compliance with Saudi Arabian financial market regulations.


4. Diplomatic and International Organizations
Diplomatic missions and international organizations can own property for official use and the residence of their representatives, contingent upon approval from the Ministry of Foreign Affairs and adherence to reciprocity principles.




Registration and Compliance Requirements

To ensure legal validity, non-Saudis must register their property acquisitions with the national real estate registry. Ownership or real rights become effective only upon this formal registration. Additionally, a real estate transfer fee of up to 5% is imposed on transactions involving non-Saudis.


Penalties for Non-Compliance
The law establishes a framework for penalties in cases of non-compliance, including:
Fines: Up to SAR 10 million for violations.

Forfeiture: In cases of fraudulent information, the property may be sold, with the proceeds directed to the state after deducting any applicable costs.

Appeals: Decisions can be contested before administrative courts within 60 days.


Strategic Implications and Opportunities
This legislative development aligns with Saudi Arabia's Vision 2030 objectives to diversify the economy and attract foreign capital. By opening up the real estate sector to non-Saudis, the Kingdom aims to stimulate market growth, enhance urban development, and create employment opportunities for citizens. Designated zones, such as parts of Riyadh and Jeddah, are expected to become focal points for foreign investment, particularly in commercial and residential projects .

Conclusion
The enactment of the Non-Saudis Ownership of Property Law represents a pivotal shift in Saudi Arabia's real estate policy, offering structured opportunities for foreign investment while maintaining regulatory oversight. As the Kingdom continues to evolve under Vision 2030, this law serves as a catalyst for economic diversification and enhanced global competitiveness.

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