Non-Saudis gain approval to own real estate in Saudi Arabia through a new regulation

Saudi Arabia has taken a significant step forward in its approach to foreign investment in real estate with the approval of the new Real Estate Ownership Law by Non-Saudis. The Royal Decree No. (M/14), published on 25 July 2025 in the Official Gazette, marks a milestone in the kingdom's efforts to attract foreign capital, expand the real estate market, and spur urban development.

The new law, effective from January 2026, allows non-Saudi individuals, companies, and non-profit entities to own real estate in designated geographic zones approved by the Council of Ministers. These zones will be outlined in the Geographic Scope Document, which includes maps of specific locations and permitted ownership limits.

Under the Real Estate Ownership Law, non-Saudis can acquire various types of ownership rights, including ownership right, usufruct right, easements, and similar rights. However, it is crucial for non-Saudis to consider the applicable real estate transaction tax and corporate income tax, in addition to the transfer fee. A fee of up to 5% will be imposed on the value of the rights disposed of by non-Saudis.

The law is designed to maintain essential regulatory safeguards while fostering investment. Any property acquired using false or misleading information may be sold via public auction. For Makkah and Madinah, ownership is permitted under special conditions for Muslim natural persons only, according to specific regulations.

The Real Estate General Authority (REGA) will publish the Geographic Scope Document for Real Estate Ownership. The detailed Implementing Regulations, clarifying registration procedures, fee structures, geographic boundaries of permitted zones, and conditions on property rights, are expected to be published within 180 days of the Law's publication in the Official Gazette.

This development aligns closely with Saudi Arabia's Vision 2030 goals, aiming to diversify the economy and create new opportunities for foreign investment. The approval of the Real Estate Ownership Law is a significant development in Saudi Arabia's approach to foreign investment in real estate and is expected to boost the kingdom's real estate market and urban development. It is essential for non-Saudis to familiarize themselves with the tax system in Saudi Arabia to facilitate compliance and plan their investments effectively.

Non-Saudis gain approval to own real estate in Saudi Arabia through a new regulation