Saudi Arabia Opens Property Market to Foreigners Under New Law

Historic Shift in Real Estate Ownership

A landmark legal framework came into effect in January 2026, fundamentally reshaping Saudi Arabia's real estate landscape by permitting foreigners to own property across various sectors. This move marks a significant departure from previous regulations, which largely restricted foreign ownership, and is a key component of the Kingdom's ambitious Vision 2030 economic diversification plan.

Under the new legislation, non-Saudis are now eligible to acquire residential, commercial, industrial, and agricultural real estate. This broadens investment opportunities for individuals, expatriates, and international businesses looking to establish a presence in the Middle East's largest economy.

Designated Zones and Holy City Restrictions

While the new law opens up significant portions of the country, specific restrictions remain, particularly concerning the holy cities of Mecca and Medina. Residential property ownership in these cities is exclusively reserved for Muslim individuals. Furthermore, non-Muslims are generally prohibited from owning property in Mecca and Medina, even within designated zones.

For non-residents, property ownership is primarily limited to 'designated zones' that will be officially identified by the Council of Ministers. However, foreign residents in Saudi Arabia may own one residential property for personal use outside these designated zones, with the explicit exclusion of Mecca and Medina. In contrast, commercial, industrial, and agricultural properties are generally open to foreign ownership across the Kingdom, including in Mecca and Medina for certain entities such as listed companies and investment funds.

Driving Economic Diversification and Investment

The introduction of this new property law is a strategic initiative aligned with Vision 2030, Saudi Arabia's blueprint for reducing its reliance on oil. The government aims to attract substantial foreign investment, stimulate growth in the real estate sector, and generate new employment opportunities. The Real Estate General Authority (REGA) has been tasked with overseeing the implementation and regulation of this new framework.

To streamline the process, the 'Saudi Properties' digital platform has been launched, serving as a centralized gateway for eligibility checks, applications, and regulatory oversight. All property transactions under the new law require mandatory registration with the relevant authorities and the real estate registry. A transfer fee of up to 5% of the property value may be applied, and violations of the law could lead to fines reaching up to SAR 10 million. This new legal framework replaces the previous 2000 Law of Real Estate Ownership and Investment by Non-Saudis, signaling a comprehensive modernization of the Kingdom's property regulations.