Executive summary

Published in the Official Gazette on 25 July 2025, Royal Decree No. (M/14) dated 19/01/1447 H (corresponding to 19 January 2025) approves the Real Estate Ownership Law by Non-Saudis (Law). The Law introduces a structured framework that enables non-Saudi individuals and entities, whether residents or nonresidents, to own and invest in real estate within designated geographic areas across the Kingdom. This reform aligns closely with Saudi Arabia's Vision 2030 goals by attracting foreign capital, expanding the real estate market and spurring urban development, all while maintaining essential regulatory safeguards. It marks a significant policy shift toward a more open and accessible real estate sector for non-Saudi investors.

The Law will take effect 180 days after its publication in the Official Gazette.

Detailed discussion

Background

On 19 January 2025, the Council of Ministers of Saudi Arabia issued Royal Decree No. (M/14), approving the issuance of the Real Estate Ownership Law for Non-Saudis.

Subsequently, Ministerial Resolution No. (42), dated 8 July 2025, repealed the previous Law on Ownership and Investment of Real Estate by Non-Saudis issued by Royal Decree No. (M/15), dated 19 July 2000.

The approval of the Law is a significant development in Saudi Arabia's approach to foreign investment in real estate.

Key provisions of the Law

Ownership rights

The Law allows non-Saudis to own real estate or acquire rights in kind within geographic areas specified by the Council of Ministers. The types of ownership permitted for non-Saudis under the Law include:

• Ownership right, which is the legal right to own real estate
• Other real rights such as usufruct right (the right to use and benefit from property), easements and similar rights

Eligible non-Saudis permitted to own property under the Law

• Non-Saudi natural persons (whether or not residing in the Kingdom)
• Non-Saudi companies (whether or not operating within the Kingdom)
• Diplomatic missions and international organizations (based on reciprocity and subject to approval by the Ministry of Foreign Affairs)
• Non-Saudi nonprofit entities
• Saudi companies with non-Saudi shareholders

Geographic scopes and locations permitted for non-Saudi ownership

Upon approval by the Council of Ministers, the Real Estate General Authority (REGA) will publish the Geographic Scope Document for Real Estate Ownership, outlining areas in which non-Saudis may own real estate in Saudi Arabia. This document will include maps of specific locations and permitted ownership limits. For Makkah and Madinah, ownership is permitted under special conditions for Muslim natural persons only, according to specific regulations.

Regulatory framework

• Mandatory registration: All real estate purchases or rights acquisitions by non-Saudis must be registered with the competent authority and recorded in the Real Estate Registry to be legally effective.
• Transfer fees: A fee of up to 5% will be imposed on the value of the rights disposed of by non-Saudis.
• Penalties: A fine may be imposed not exceeding (5%) of the value of the right in-kind that is subject to a violation, not exceeding 10 million Saudi Riyals (SAR10m). Additionally, any property acquired by using false or misleading information may be sold via public auction.

Implications

Non-Saudis should stay informed regarding the detailed Implementing Regulations expected to be published within 180 days of the Law's publication in the Official Gazette. These regulations will clarify registration procedures, fee structures, geographic boundaries of permitted zones and conditions on property rights. Additionally, all non-Saudis planning to invest in real estate in Saudi Arabia must consider the applicable real estate transaction tax and corporate income tax, in addition to the transfer fee. It is essential for non-Saudis to familiarize themselves with the tax system in Saudi Arabia to facilitate compliance and plan their investments.