Saudi Arabia is officially opening parts of its real estate market to foreign buyers with the launch of a new law that takes effect on January 21, 2026. This long-awaited legislation marks a major shift in the Kingdom’s property landscape, aligning with its broader Vision 2030 economic diversification agenda.
Under the new law, non-Saudis can purchase residential, commercial, industrial, and agricultural property in designated areas. The reform aims to attract long-term capital while maintaining control over sensitive areas like Mecca and Medina.
New rules for foreign ownership
The key feature of the new law is the introduction of designated zones where non-Saudis can buy property. These zones will be identified by the Council of Ministers based on recommendations from the Real Estate General Authority (REGA). Major urban areas such as Riyadh, Jeddah, and parts of the Eastern Province are expected to be included, but foreign ownership will remain restricted outside these approved zones.
Foreign residents can also own one personal residence outside the designated zones, except in the holy cities of Mecca and Medina. However, non-residents can only purchase property within these zones once they are officially announced.
Mecca and Medina restrictions remain
Ownership in Mecca and Medina continues to be limited to Muslims. Even then, foreign ownership is subject to stringent rules, with foreign companies generally prohibited from owning property in these cities except for specific operational needs.
This restriction ensures that the sacred nature of these cities is preserved, while still allowing for some flexibility in property usage for foreign investors and companies operating in Saudi Arabia.
Financial and compliance obligations for foreign buyers
The new legislation imposes several financial and compliance obligations on foreign buyers. A real estate transfer tax of 5% applies to property transactions involving non-Saudis, with a possible additional transfer fee that could increase the total levy to 10%, depending on the transaction structure.
For certain types of investments, a minimum investment threshold of SAR 30 million ($8 million) has been set. This is intended to encourage long-term, substantial capital inflows rather than speculative investments. All acquisitions must be registered in the national real estate registry to be legally recognized.
Enforcement and penalties
The law establishes stricter enforcement measures to ensure compliance. Violations, such as providing false information or attempting to purchase property in restricted areas, could result in fines of up to SAR 10 million ($2.7 million) or, in serious cases, the forced sale of the property.
A specialized committee under REGA will oversee enforcement, with decisions subject to appeal through the administrative courts.
Corporate and institutional access
The new law also facilitates property ownership for foreign companies, investment funds, and non-profit organizations. These entities can acquire property within the designated zones for their business operations, including offices, industrial facilities, and staff accommodation.
Listed Saudi companies with foreign ownership are allowed to own property across the Kingdom, while unlisted companies may acquire property within the designated zones and, where necessary, outside these zones under specific conditions.
Impact on Saudi Arabia’s real estate market
This legal reform arrives as Saudi Arabia’s real estate market continues to show strong growth. The country’s non-oil economy accounted for over half of its GDP in 2025, boosting demand across various property sectors.
The Kingdom is also undergoing large-scale development projects, including NEOM, Diriyah, and the Red Sea developments, with billions of dollars in committed investments. These projects are expected to further drive demand for residential, commercial, and industrial properties, benefiting from the new foreign ownership rules.
Looking ahead
As Saudi Arabia opens its property market to foreign buyers, the Kingdom is positioning itself as a regional hub for international investment. The new law reflects the government’s broader strategy to diversify its economy under Vision 2030, making the real estate sector more accessible to global investors.
