Saudi Arabia to Allow Foreign Property Ownership in 2026

Decision and Reference

The Saudi Cabinet, chaired by Crown Prince Mohammed bin Salman, approved on July 8, 2025, an updated system allowing non-Saudis to own property in the Kingdom. The decision was issued by Royal Decree No. M/14, replacing the old 2000 system and representing a radical shift in the Kingdom's real estate policy.

Implementation Date

The new system will officially come into effect in **January 2026**, specifically on **January 21, 2026**, after a 180-day transitional period from its publication in the official gazette "Um Al-Qura" on July 25, 2025. During this period, the General Authority for Real Estate will issue detailed executive regulations on the official "Istiqbaal" platform.

Permitted Areas and Cities for Ownership

Major cities available for ownership include:
Ownership will be allowed in specific geographical areas to be officially announced by the General Authority for Real Estate, primarily focusing on:

- **Riyadh**: The capital and main business hub, focusing on developed neighborhoods and modern complexes
- **Jeddah**: The economic capital and western gateway, including major urban projects
- **Dammam and Khobar**: The vital Eastern Province
- **Abha**: Other tourism and investment destinations

Special Areas with Specific Conditions:
- **Mecca and Medina**: Ownership is allowed for resident Muslims only in specific areas and under special conditions, considering the religious and historical sensitivities of these cities.

Major Projects:
The system includes the possibility of investing in:
- **NEOM** project (valued at $500 billion)
- **Qiddiya** entertainment project
- Special economic zones
- Integrated urban communities

Targeted and Beneficiary Categories

1. Foreign Individuals:
- **Residents with valid residency**: entitled to own one property for personal housing outside the specified areas, in addition to properties within the approved areas
- **Non-residents**: can own only within specified geographical areas

2. Foreign Companies:
- Listed and unlisted companies
- Licensed investment funds
- Special purpose companies
- Allowed to own properties for their business operations and employee housing

3. Citizens of Gulf Cooperation Council countries:
They have additional privileges including owning up to 3 properties for housing and investment purposes

4. Diplomatic missions and international organizations

Basic Conditions and Regulations

For individuals:
- Valid residency
- Approval from the Ministry of Interior for housing ownership
- Property area not exceeding 3,000 square meters for residential purposes
- Ownership must be for personal housing
- If purchasing land, construction must begin within 6 years
- Property cannot be disposed of before 4 years from registration date

For investors:
- Investment value must not be less than **30 million Saudi Riyals**
- Obtain a license to conduct economic activity from the relevant authority
- Registration in the official real estate registry

Types of permissible properties:
- Residential properties (villas, apartments, houses)
- Commercial properties (offices, shops, shopping centers)
- Industrial properties
- Development lands
- Farms in approved areas

Digital Fractional Ownership

The new system officially allows for **Digital Fractional Ownership**, enabling investors to purchase tokenized shares in properties remotely without the need to visit the Kingdom, which the General Authority for Real Estate considers a "key innovation" in the new framework.

Expected Fees and Taxes

- Real estate registration fees
- Value-added tax on certain transactions
- Zakat or annual municipal fees (depending on property type)
- Detailed information will be announced before January 2026

Penalties for Violations

To ensure market transparency and prevent fraud, the system imposes strict penalties including:
- Financial fines up to **10 million Saudi Riyals**
- Confiscation of property in cases of serious violations
- License revocation

Compatibility with Residency Programs

The new system aligns with:
- **Premium Residency (Green Card)**: which previously required property ownership valued at 4 million Riyals, and this threshold is expected to be lowered to encourage more expatriates
- No-sponsor residency system (2019)
- Regulation of ownership for citizens of Gulf countries

Strategic Goals (Vision 2030)

The system aims to:
- Attract foreign direct investments worth **$100 billion annually by 2030**
- Increase real estate supply and achieve a balance between supply and demand
- Diversify non-oil income sources
- Enhance Saudi Arabia's status as a global investment destination
- Support major projects and urban development
- Create job opportunities in over 80 sectors related to real estate

Expected Market Impact

In the short term:
- Shares of Saudi real estate companies rose by 8-9% immediately after the announcement of the decision
- The real estate management and development sector index jumped by over 2.9%
- Companies like "Rital" and "Masar" led the gains

In the medium and long term:
- Expected increase in property prices in major cities
- Entry of international and American developers
- Expansion of bank mortgage portfolios
- The market recorded a value of **60 billion Riyals** in the first quarter of 2025, with 65% being residential transactions

Supervisory Authorities

- **General Authority for Real Estate (REGA)**: the main body responsible for determining geographical areas and issuing detailed maps
- **Ministry of Municipal and Rural Affairs and Housing**: general supervision and regulation
- **Ministry of Interior**: security approvals
- **Council of Economic and Development Affairs**: approval of strategic proposals

How to Prepare

For those interested in investing:
1. Ensure eligibility and applicable category
2. Follow the official **Istiqbaal** platform and the General Authority for Real Estate website for maps and details
3. Consult a local legal advisor
4. Prepare required documents (identity proof, residency, financial feasibility)
5. Open a Saudi bank account
6. Register in the official real estate registry

Summary

This historic decision represents a qualitative shift in the Kingdom's real estate policy, moving the market from a highly restricted system to a carefully organized and open framework. It is expected to bring about a radical transformation in the investment and real estate landscape, enhancing Saudi Arabia's appeal to global talent and capital while maintaining national values and market balance.