Saudi Arabia Foreign Property Ownership Law 2025: Key Rules & Restrictions

Real Estate July 26, 2025

OplusAdmin

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In a major regulatory shift, Saudi Arabia has officially introduced a new real estate law allowing foreign individuals and entities to own or obtain legal rights over property in designated areas of the Kingdom. The Saudi Arabia foreign property ownership law marks a significant evolution from previous legislation, broadening access to one of the region’s largest and fastest-growing real estate markets.

At OPlus Realty, we break down the key provisions of this new law, what it means for investors, and how you can take advantage of the opportunities emerging in the Saudi property landscape.

Official Publication and Timeline

The law was published in the Umm Al-Qura Gazette in July 2025 and will officially come into force 180 days from its publication date. This gives stakeholders — including investors, developers, and foreign residents — ample time to understand the framework and prepare accordingly.

Who Can Own Property Under the New Law?

The legislation opens ownership rights to:

Foreign individuals (non-Saudis residing in Saudi Arabia)
Companies (both listed and private, with foreign shareholders)
Non-profit organizations
Investment funds and special-purpose entities
Diplomatic missions and international organizations

Each category must comply with specific rules, usage limitations, and registration requirements.

Designated Ownership Zones and Council Oversight

Ownership is not unlimited. The Council of Ministers, in coordination with the Real Estate General Authority and the Council of Economic and Development Affairs, will determine:

Geographical zones where foreign ownership is permitted
Caps on ownership percentages for individuals or companies
Usufruct rights time limits and operational criteria

This ensures a balanced real estate market that supports Vision 2030 goals while protecting national interests.

Makkah & Madinah: Eased, Yet Restricted Access

While the new law lifts some long-standing restrictions, Makkah and Madinah remain off-limits to foreign ownership, except under very limited conditions:

Individual Muslim foreigners may own property if specific conditions are met
Foreign companies may own real estate in the holy cities only for operational use (e.g., staff housing)

Previous bans affecting GCC nationals have been lifted, bringing all non-Saudis under a unified legal framework.

Rules for Residents and Corporates

For Individuals:

Must be legal residents of Saudi Arabia
Allowed to own one residential property for personal use
Property must be located outside restricted zones

For Companies & Funds:

Non-listed companies with foreign shareholders can own real estate across the Kingdom
Property must serve corporate use (operations, offices, staff housing)
Investment vehicles must comply with Capital Market Authority (CMA) rules

Diplomatic & International Organizations

The law also covers foreign embassies, international agencies, and government-related bodies, allowing them to:

Own properties for official purposes
House diplomatic staff or representatives

Subject to reciprocity and Ministry of Foreign Affairs approval.

Registration and Fees

All non-Saudi property holders must register ownership or usufruct rights with a national real estate registry.

Important requirements:

Ownership becomes legally valid only after registration
Transactions involving foreigners will incur a property transfer fee of up to 5%

Penalties and Enforcement

The law establishes a strict compliance regime:

Fines up to SAR 10 million for violations
Forced property sales if false information is submitted
Enforcement led by a dedicated committee under the Real Estate General Authority
Appeals allowed via administrative courts within 60 days