Foreign Property Ownership Law Published

Saudi Arabia has introduced a new law significantly altering real estate ownership regulations for non-Saudis. This law allows individuals, companies, and non-profit entities to own or obtain real estate rights in designated zones, including ownership, usufruct, and leaseholds. However, ownership is subject to location-specific restrictions.

The law maintains the prohibition of foreign ownership in Makkah and Madinah, except under specific conditions for individual Muslim owners. The Council of Ministers, in collaboration with the Real Estate General Authority, will define permitted zones, ownership limits, and usufruct timeframes. Foreign residents can own one residential property outside restricted areas, while non-listed companies, investment funds, and special-purpose entities can own property for operational purposes or employee housing, including in the holy cities.

Diplomatic missions and international organizations can own property for official functions, subject to the Ministry of Foreign Affairs' approval and reciprocity. All non-Saudi entities must register with the relevant authority before acquiring property, with a real estate transfer fee of up to 5% applicable.

The law enforces strict penalties for violations, including fines up to SR10 million and potential forced property sales. A dedicated committee will investigate breaches, with decisions appealable to administrative courts. This new framework replaces the 2000 legislation, with executive regulations expected within six months.