Freehold
Synonyms: Full Ownership، Fee Simple، Absolute Ownership، Outright Ownership
Last updated: 2026-09-25
Short Definition
Freehold, in Saudi terms full ownership, is permanent ownership with no time limit over both the bare title and the use of a property, giving the owner alone the right to use and exploit it and to dispose of it by sale, gift, mortgage, endowment or bequest, and passing to his heirs on death.
Overview
Legal Basis
Civil Transactions Law issued by Royal Decree No. (M/191) dated 29/11/1444H: Article 608 (content of the right of ownership: use, exploitation, disposal and fruits), Article 609 (ownership extends above and below the land to the useful extent), Article 610 (no deprivation of property except under statute) and Articles 611 and 613 (restrictions on ownership and neighbour nuisance). Real Estate Registration Law issued by Royal Decree No. (M/91) dated 19/9/1443H (property registration deed and the register's probative force). Law of Real Estate Ownership by Non-Saudis issued by Royal Decree No. (M/14) dated 19/1/1447H, in force January 2026.
Practical Example
Omar buys land in Riyadh under a full-ownership deed for SAR 1,500,000, with the 5% Real Estate Transaction Tax (SAR 75,000) handled as agreed with the seller. He builds a villa under a building permit, mortgages it to a bank for financing, and later leases its annex under a contract documented on Ejar. Ten years on, he leaves a third of its value by will to endow the neighbourhood mosque, with the rest going to his heirs. All these dispositions are possible because full ownership has no time limit. When he wants to add a third floor that breaches the district's building requirements, however, he is refused, because full ownership is bound by rules made in the public interest. And if part of the land were expropriated for a road widening, he would be entitled to compensation at market value plus 20%.
Common Mistakes
- ✗Believing full ownership in Saudi Arabia is reserved for citizens, when companies, GCC citizens and non-Saudis within designated zones can also own.
- ✗Thinking full ownership is absolute and unrestricted, when it is subject to planning and building rules, neighbour rules and expropriation in the public interest.
- ✗Confusing ownership of the bare title alone with full ownership, as the property may be burdened by someone else's usufruct or long lease.
- ✗Using the term 'freehold' in Saudi contracts in its UAE or British sense without stating that it means full ownership under a deed.
- ✗Relying on a sale contract without an official transfer and new deed, although ownership passes only once any procedure required by law is completed.
International Differences
In England and Wales, freehold means owning land and building indefinitely, as opposed to leasehold, which grants possession for a fixed term and is common for flats. In the United States the equivalent is fee simple. In the UAE, 'freehold' is mostly used to describe areas where foreigners may own outright. In Turkey, full ownership (tam mülkiyet) is the norm and is recorded at the land registry. In Saudi Arabia, ownership under a deed is by nature full ownership, there is no leasehold system as a form of ownership, and long-term use of another's property is achieved through a lease or a usufruct right.
