Saudi Arabia has this month formally opened elements of its actual property market to international patrons, bringing into power a long-awaited regulation that enables non-Saudis to personal property in designated areas of the Kingdom.
The brand new Regulation on Non-Saudis’ Possession of Actual Property, authorised by royal decree final yr and revealed within the official gazette in July 2025, got here into impact this month following a six-month transition interval. This marks one of the vital structural shifts within the Kingdom’s property market in a long time and is intently aligned with the federal government’s broader financial diversification agenda beneath Imaginative and prescient 2030.
For months earlier than the regulation was formally authorised, builders, buyers and advisers had been intently monitoring its progress, with expectations constructing that Saudi Arabia would ultimately observe different Gulf markets in easing restrictions on international possession. Whereas international funding in Saudi actual property has been permitted in restricted kinds since 2000, the brand new laws replaces that older framework with clearer guidelines, wider eligibility and stricter enforcement.
Designated zones and clear limits
On the coronary heart of the reform is a designated-zone mannequin. Underneath the brand new regulation, non-Saudi people and entities might purchase possession, usufruct or different rights in rem over property positioned inside particular areas to be recognized by the Council of Ministers, primarily based on suggestions from the Actual Property Basic Authority (REGA).
These zones have but to be formally revealed, however are extensively anticipated to incorporate chosen districts in main financial centres resembling Riyadh, Jeddah and elements of the Japanese Province. Outdoors the authorised zones, international possession stays restricted, topic to slim exceptions.
The regulation permits non-Saudis to buy residential, industrial, industrial and agricultural property inside designated areas. For residential possession, international residents of Saudi Arabia are granted a further proper to personal one private residence outdoors the zones, supplied it’s not positioned within the holy cities of Mecca or Medina.
Non-residents, in contrast, might solely personal property throughout the designated zones as soon as these are introduced.
Restrictions stay firmly in place for Mecca and Medina. Possession within the two holy cities continues to be restricted to Muslims, and even then topic to circumstances. Overseas firms are typically prohibited from proudly owning property in Mecca and Medina, besides the place Saudi-incorporated firms with international shareholders require actual property for operational functions or worker housing, and the place such possession is permitted beneath the regulation and accompanying rules.
Charges, thresholds and enforcement
The laws introduces new monetary and compliance obligations for international patrons. Property transactions involving non-Saudis are topic to an actual property switch tax of 5 per cent, in step with current Saudi guidelines, in addition to a further switch payment that will convey the mixed levy to as a lot as 10 per cent, relying on the construction of the transaction and future implementing rules.
For sure funding actions, a minimal funding threshold of SAR 30 million ($8 million) applies, reflecting the federal government’s intention to draw longer-term capital moderately than speculative inflows. All acquisitions have to be registered within the nationwide actual property registry to be legally efficient, with notarisation barred for non-compliant transactions.
The regulation additionally establishes a harder enforcement regime. Violations, together with the supply of false info or possession in prohibited areas, may end up in fines of as much as SAR10 million ($2.7 million) and, in severe circumstances, the compelled sale of the property. Oversight is vested in a specialised committee beneath REGA, with selections topic to attraction earlier than the executive courts.
Company and institutional entry
Overseas firms, funding funds and non-profit organisations are among the many main beneficiaries of the brand new framework. Each listed and unlisted entities might purchase property inside designated zones to assist their enterprise actions, together with places of work, industrial amenities and workers lodging.
Saudi firms with international possession are handled in another way relying on their standing. Corporations listed on Tadawul might personal property throughout the Kingdom, together with in Mecca and Medina, topic to Capital Market Authority guidelines. Unlisted firms with international shareholders might also purchase property in designated zones and, the place needed for operations, outdoors these zones beneath specified circumstances.
Diplomatic missions and worldwide organisations accredited in Saudi Arabia are explicitly permitted to personal premises for official use, topic to approval by the Ministry of Overseas Affairs and reciprocity preparations with their dwelling nations.
Market context
The regulation comes into impact as Saudi Arabia’s property market sees sustained momentum. In accordance with CBRE Center East, the Kingdom’s non-oil financial system accounted for 56 per cent of GDP in 2025, underpinning demand throughout residential, workplace, retail, hospitality and industrial segments.
Saudi Arabia’s improvement pipeline is among the many largest globally, with round $440 billion in dedicated initiatives and a longer-term pipeline valued at $1.55 trillion. Giga-projects resembling NEOM, Diriyah and the Crimson Sea developments dominate future provide, whereas extra quick exercise has been concentrated in Riyadh, pushed partially by the Regional Headquarters programme.
Workplace demand within the capital has remained significantly robust. Grade A rents rose 15 per cent year-on-year in 2025, with occupancy charges near 98 per cent, whereas residential transactions grew practically 18 per cent quarter-on-quarter within the third quarter, reaching SAR 7.7 billion in worth.
These tendencies have been supported by a collection of regulatory interventions over the previous yr, together with the growth of the White Land Tax to encourage improvement and a five-year lease freeze in Riyadh geared toward bettering affordability.
