Foreign Ownership
Synonyms: Non-Saudi Property Ownership، Foreign Real Estate Ownership، Expat Property Ownership، Foreign Freehold
Last updated: 2026-10-05
Short Definition
Foreign ownership is the right of non-Saudi individuals, companies and entities to own real estate or acquire other rights in rem over it in the Kingdom.
Overview
Legal Basis
Law of Real Estate Ownership by Non-Saudis issued by Royal Decree No. (M/14) dated 19/1/1447H, published on 30/1/1447H and in force 180 days after publication (January 2026): Article 2 (geographic zone, one residential property for residents, exception for Makkah and Madinah), Articles 3 and 4 (companies and funds), Article 5 (Premium Residency and GCC-citizen rules unaffected), Article 8 (registration; ownership valid only once recorded in the Real Estate Registry), Article 9 (fee of up to 5%), Articles 10 and 12 (penalties) and Article 14 (it replaces the law issued by Royal Decree No. (M/15) dated 17/4/1421H). Its implementing regulation, published in Umm Al-Qura on 18/1/1448H (3 July 2026): Article 9 (fee of 2% for all rights and uses in Riyadh city, Makkah city, Madinah city and Jeddah Governorate) and Article 10 (0% elsewhere and in nine listed cases). Council of Ministers decisions defining the zones.
Practical Example
A Jordanian engineer lawfully resident in Riyadh wants to buy a villa for his family for SAR 2,000,000 in a district outside the geographic zone designated for non-Saudi ownership. He applies through the 'Saudi Properties' platform using his residence permit number and is approved, because a resident may own one residential property outside the zone. On completion, the 5% Real Estate Transaction Tax (SAR 100,000) is dealt with as agreed with the seller. The transaction is also subject to the non-Saudi ownership fee, capped by law at 5%, which the implementing regulation set at 2% in Riyadh city, Makkah city, Madinah city and Jeddah Governorate and 0% elsewhere; it is not yet clear which of the two rates applies to a resident's single home outside the zone in Riyadh (SAR 40,000 at 2%, or nothing), so it should be confirmed with REGA. His ownership becomes valid only once recorded in the Real Estate Registry. When he later wants to buy a second flat in the same district as an investment, he is told this is not available outside the geographic zone and that investment is possible within the zones set by the Council of Ministers.
Common Mistakes
- ✗Relying on information about the repealed 1421H law, although the new law in force since January 2026 changed the rules fundamentally.
- ✗Assuming a foreigner can own anywhere, when investment ownership is limited to the geographic zones set by the Council of Ministers.
- ✗Assuming a non-Muslim can own in Makkah or Madinah, although individual ownership there is limited to Muslims.
- ✗Owning through a Saudi nominee to get around the restrictions, which exposes both parties to penalties that can extend to a forced sale.
- ✗Forgetting the non-Saudi ownership fee (capped by law at 5%; set by the regulation at 2% in Riyadh city, Makkah city, Madinah city and Jeddah Governorate and 0% elsewhere) on top of the 5% Real Estate Transaction Tax when budgeting the purchase.
International Differences
In the UAE, foreigners can own freehold in designated areas in Dubai, Abu Dhabi and elsewhere, and some purchases can be linked to long-term residence visas. In Turkey, foreigners may own property on a reciprocity basis, subject to restrictions on military and security zones and on a share of each district's area, and property investment can be linked to citizenship programmes. Egypt allows foreigners to own a limited number of units under conditions. The new Saudi law stands out for its geographic-zone model, a resident's right to one home outside the zones, special rules for Makkah and Madinah and a fee capped by law at 5%, set by the regulation at 2% in Riyadh city, Makkah city, Madinah city and Jeddah Governorate and 0% elsewhere, on top of the Real Estate Transaction Tax.
