Introduction
For years, property ownership in Saudi Arabia has been one of the most confusing topics for expats.
Many residents assumed buying a home was either impossible or restricted to rare exceptions, while investors relied on company structures or long-term leases instead of ownership.
That is about to change.
Starting January 2026, Saudi Arabia will implement a new legal framework for foreign property ownership called Foreign Property Ownership Law, fundamentally reshaping how non-Saudis can own residential, commercial, industrial, and agricultural real estate across the Kingdom.
This article explains the new law clearly and practically, answering the questions expats actually ask:
- Where can foreigners buy property?
- What cities are restricted?
- Can residents and non-residents both own property?
- What about companies, investors, and funds?
- What fees, registrations, and penalties apply?
If you live in Saudi Arabia or plan to invest here, this update matters.
Background: Why Saudi Arabia Changed the Law
Saudi Arabia’s Vision 2030 focuses on:
- Attracting foreign investment
- Improving housing market liquidity
- Encouraging long-term residency
- Supporting economic diversification
Property ownership plays a major role in all four.
Until now, foreign ownership rules were fragmented, unclear, and heavily restricted. This created:
- Legal uncertainty
- Informal arrangements
- Hesitation among long-term residents
The new framework aims to standardize, control, and expand ownership rights while protecting strategic cities and religious areas SLG.
When the New Law Takes Effect
The new foreign property ownership system will be implemented in January 2026.
Important note:
- The executive regulations will define exact zones, fees, and procedures.
- Ownership is not automatic; approval and registration are mandatory.
Cities Where Foreigners Cannot Own Residential Property
Under the new system, residential ownership by foreigners will NOT be allowed in four cities:
- Makkah
- Madinah
- Riyadh
- Jeddah
These cities are excluded due to:
- Religious importance
- Population density
- Strategic housing management
This does not mean foreigners are banned entirely from property-related rights in these cities, which is explained later.
Residential Property Ownership for Foreign Residents
Foreigners legally residing in Saudi Arabia (Iqama holders) will be allowed to:
- Own one residential property
- Outside designated ownership zones
- Excluding Makkah and Madinah
Key points:
- Ownership is limited to one unit
- Property must be registered officially
- Residency must be valid and lawful
This is a significant change for long-term expats planning stability rather than speculation
Rules for Non-Resident Foreign Buyers
Foreigners not residing in Saudi Arabia will also be allowed to own property, but under stricter conditions:
- Ownership limited to designated zones only
- Zones approved by government authorities
- Type of ownership defined by regulations
This allows Saudi Arabia to control demand while opening doors to structured international investment.
Commercial, Industrial, and Agricultural Property Rules
One of the most impactful changes is in non-residential property.
Foreign ownership will be allowed in all Saudi cities for:
- Commercial properties
- Industrial facilities
- Agricultural land
There are no city-level exclusions for these categories.
This directly supports:
- Manufacturing growth
- Logistics hubs
- Business expansion
- Food security initiatives
Ownership Zones and Government Approvals
Foreign ownership is not random or uncontrolled.
Property rights will be granted only in areas approved by:
- Council of Ministers
- Real Estate General Authority
- Council of Economic and Development Affairs
Approvals will define:
- Geographic boundaries
- Maximum ownership ratios
- Permitted real estate rights
- Conditions and limitations
This ensures transparency and legal certainty.
Special Rules for Makkah and Madinah
The holy cities remain under strict religious regulations.
Key rule remains unchanged:
- Only Muslims may own residential property in Makkah and Madinah
However:
- Certain companies and funds may own property under regulated structures
- Ownership does not imply personal residential rights
Property Ownership for Companies and Investors
Non-Listed Companies
Companies with foreign ownership may:
- Own property in approved zones
- Own property in Makkah and Madinah if incorporated under Saudi law
- Own property outside zones for business or employee housing
Conditions will be defined by executive regulations.
Listed Companies, Funds, and Special Entities
Listed companies, investment funds, and special-purpose vehicles will be allowed to own property:
- Across the Kingdom
- Including Makkah and Madinah
- Subject to Capital Market Authority controls
This supports institutional investment while maintaining oversight.
Fees, Registration, and Legal Recognition
Foreign ownership does not grant special privileges.
Key requirements:
- Mandatory registration in the Real Estate Registry
- Ownership valid only after registration
- Transaction fee up to 5% of property value
Exact percentages and payment methods will be clarified in regulations.
Penalties and Legal Consequences
Saudi authorities have emphasized compliance.
Violations may lead to:
- Warnings
- Financial penalties
- Legal action
Serious violations:
- False information fines up to SAR 10 million
- Court-ordered sale of property
This highlights the importance of legal advice and proper registration.
Real-Life Tips for Expats in Saudi Arabia
- Do not rely on verbal assurances from agents
- Always verify approved ownership zones
- Budget for fees beyond property price
- Keep Iqama and residency records updated
- Avoid informal ownership structures
Common Mistakes Foreign Buyers Make
- Assuming all cities are open for ownership
- Buying before regulations are published
- Ignoring registration requirements
- Using unofficial intermediaries
- Confusing residency rights with ownership rights
Frequently Asked Questions (FAQs)
Can expats buy property in Saudi Arabia from 2026?
Yes, under defined conditions and approved zones.
Can foreigners own property in Riyadh?
Residential ownership is excluded, but commercial ownership is allowed.
Is Makkah completely closed to foreigners?
Residential ownership is limited to Muslims only.
How many properties can a foreign resident own?
One residential unit.
Is Premium Residency affected?
No, the new law does not override existing residency privileges.
Will ownership give citizenship?
No, property ownership does not grant nationality or residency benefits.
