For a quarter of a century, foreign ownership of property in Saudi Arabia ran under a law from 2000, the Law of Real Estate Ownership and Investment by Non-Saudis. That regime ended on 22 January 2026, when the new Law of Real Estate Ownership by Non-Saudis entered into force. On 23 June 2026 the Council of Ministers filled in the missing pieces: the Implementing Regulations and the map of where non-Saudis may buy.
The result is a rules-based market with a single digital front door, a defined set of zones, and a price tag that is lower than the first headlines suggested. Much of what circulated in 2025 quoted a total cost of up to 10 percent on top of the purchase price. The final figure, for a buyer in the four cities where a fee applies, is 7 percent, and elsewhere it is 5 percent. What follows is what the law and the Regulations actually say, as published in the official gazette.
The legal timeline
The law was approved by Royal Decree M/14 dated 19 Muharram 1447H, which corresponds to 14 July 2025, and by Council of Ministers Decision 42, published in the official gazette Umm Al-Qura on 25 July 2025. Article 15 set the start date at 180 days after publication, and the Real Estate General Authority (REGA) announced that the law took effect on 22 January 2026. It replaces the old Law of Real Estate Ownership and Investment by Non-Saudis of 2000 (Article 14).
At that point the framework was only half built. The law leaves the details to the Implementing Regulations and to a Council of Ministers resolution fixing the geographic area open to non-Saudis, the rights they may acquire, the maximum foreign share in each area and the maximum usufruct term (Article 2(2)).
Both arrived together. At its session in Jeddah on 23 June 2026, the Cabinet approved "the implementing regulations of the Law of Real Estate Ownership by Non-Saudis" and "the geographic areas designated for non-Saudi property ownership". The Regulations, approved by Decision 43 of 8 Muharram 1448H, were published in full in Umm Al-Qura on 3 July 2026. The minister of municipalities and housing, who chairs REGA's board, described the limited zones as a precise regulatory tool to steer property growth, while preserving the special status of Makkah and Madinah.
Who may buy
The law defines a "non-Saudi" broadly (Article 1): a natural person without Saudi nationality, a non-Saudi company, a non-Saudi non-profit entity, and any other foreign legal person the Council of Ministers designates. REGA's Q&A on the law adds that individuals qualify whether or not they live in the Kingdom, and that a "non-Saudi company" means one not established under the Saudi Companies Law, including foreign companies with only a branch or representative office in Saudi Arabia.
Unlisted Saudi companies with foreign shareholders may own property inside the zones, including in Makkah and Madinah (Article 3(1)). Listed companies, licensed funds and special purpose entities follow capital markets rules (Article 4), and diplomatic missions have their own route (Article 7).
Where foreigners can buy
The basic rule is simple: a non-Saudi may own property, or acquire other rights in rem such as usufruct, within the geographic area set by the Council of Ministers (Article 2(1)). The official list lives on REGA's Saudi Properties portal, which shows the approved zones on a map and gives, zone by zone, the permitted uses, the types of rights available, the maximum foreign ownership share and any usufruct term.
Riyadh and Jeddah are open, but only in defined areas. REGA's Q&A states that ownership is available in both cities "within specific areas", chosen to keep the local housing market in balance. In the city of Riyadh, the portal currently lists nine zones, all of them large planned districts or major projects: King Salman Park, Diriyah Gate, the Sports Boulevard and Arts District, King Salman International Airport, the King Abdullah Financial District, New Murabba, the transit-oriented development sites, Qiddiya and Sedra. A buyer looking for a flat in an established neighbourhood outside those areas will not find it on the list.
Makkah and Madinah carry a religious condition. Inside the two holy cities, individual ownership is limited to Muslim natural persons (Article 2(4)), and REGA's January announcement confirmed that ownership there is restricted to Saudi companies and Muslim individuals, whether they live inside or outside the Kingdom. The portal displays the same warning for non-Muslims on both cities' zones.
Outside the four cities, the portal lists cities and governorates across all thirteen regions, along with the giga projects, AlUla and the special economic cities and zones. Each listing carries its own rules, so the practical step is the same everywhere: check the specific plot or project on the portal before signing anything.
The resident's exception
There is one route outside the zones, and it is reserved for people who already live in Saudi Arabia. A non-Saudi individual legally residing in the Kingdom may own a single property as their residence outside the geographic area, except in Makkah and Madinah (Article 2(3)).
The Regulations close the obvious workaround. A resident's spouse and non-Saudi children count as dependants for this purpose, and none of them may own a separate residence in their own name unless the marriage ends or the child reaches 25 (Regulations, Article 7). One family, one home outside the zones.
A Saudi company with foreign shareholders may likewise own property outside the zones, except in the holy cities, for its business and staff housing, with prior Ministry of Investment approval (Regulations, Article 8).
What it costs
Two government charges apply to the transaction.
The real estate transaction tax is 5 percent. According to ZATCA, this tax applies "at a rate of 5% on real estate transactions" under the Real Estate Transaction Tax Law issued by Royal Decree M/84, in force since 10 April 2025. It applies to Saudis and foreigners alike, and the Saudi Properties portal reminds users that it has to be issued before an ownership transfer can start.
The non-Saudi fee is 2 percent, and only in four places. Article 9 of the law allows REGA to levy a fee on dispositions of property rights by non-Saudis of no more than 5 percent, "without prejudice to any fees or taxes prescribed by law". REGA's Q&A, written before the Regulations, added that cap to the 5 percent transaction tax and arrived at a total of 10 percent. That is the source of the widely quoted number.
The Regulations then set the actual rate. Article 9 fixes the fee at 2 percent for all types of rights and all uses in four places: the city of Riyadh, the city of Makkah, the city of Madinah and Jeddah governorate. Article 10 sets a zero rate for every disposition elsewhere in the Kingdom, and for a list of cases inside the four cities, including inheritance divisions, court-ordered transfers, a property returned to the seller within 180 days on the same terms, a transfer by an individual to a Saudi company or fund they wholly own, and sales of units by a foreign owner who developed them on its own land, provided the development is completed within the licensed period and the units are sold within a year of the licence expiring.
So for a foreign buyer of a flat in a Riyadh or Jeddah zone, the government charges add up to 7 percent of the price. In a zone outside the four cities, the figure is 5 percent, the same as for a Saudi buyer. Neither figure includes brokerage, valuation or any developer or association fees. Which party bears the transaction tax is a point to settle in the sale contract; on new-build listings the portal shows unit prices with the 5 percent already added.
For comparison, The Brief covered how another market is moving the opposite way in Greece's planned 15 percent transfer tax for non-EU buyers. The distinction drawn in Countries With No Property Tax in 2026, between a one-off cost of buying and a recurring cost of holding, matters here: both Saudi charges are paid once, at the point of transfer.
How a purchase works
Every application runs through REGA's electronic portal, linked to the Real Estate Registry (Regulations, Article 6).
Non-residents must first complete three steps (Regulations, Article 2):
- obtain a digital identity issued by the Ministry of Interior, which REGA says is issued through Saudi missions and embassies abroad;
- open a bank account in Saudi Arabia in their own name;
- obtain a Saudi phone number in their name, linked to that digital identity.
Residents log in with their residence ID, and the portal checks their eligibility automatically.
Foreign companies register with the Ministry of Investment, disclose their direct and indirect owners, appoint a representative with a Saudi-issued identity and open a local bank account. They must notify the ministry within 15 days whenever 5 percent or more of the company changes hands (Regulations, Article 3).
Two further rules matter for every buyer. All payments connected with the purchase or sale must go through electronic payment channels regulated by the Saudi Central Bank (Regulations, Article 6(3)), so cash deals are out. And ownership is valid only once registered in the Real Estate Registry (law, Article 8(2)). A signed contract is not yet ownership.
Penalties
The law caps fines for general breaches at 5 percent of the value of the right, up to SAR 10 million (Article 10), graded in a table annexed to the Regulations. Deliberately false or misleading information used to acquire property brings the same maximum fine plus a court-ordered sale (Article 12). The owner gets back the lower of the property's value and what they paid, minus fines, taxes and costs; the rest goes to the State Treasury.
Owning property does not give you residency
This is the point most likely to disappoint. Article 6 of the law is explicit: owning property or acquiring rights over it "shall not entail any rights or privileges other than the rights prescribed by law for the owner of a right in rem". A title deed is not a visa. A non-resident owner still needs a separate basis to live in the Kingdom.
That basis exists, but it is a separate scheme with its own threshold. The law expressly preserves the Premium Residency regime and the GCC nationals' ownership rules (Article 5). The Premium Residency Center's Real Estate Owner Residency requires:
- Category 1: ownership or usufruct of real estate in Saudi Arabia worth at least SAR 4,000,000. The property must be residential, an existing building rather than land, not mortgaged and never mortgaged later.
- Category 2: purchase of one residential unit off-plan worth at least SAR 4,000,000, with at least SAR 1,000,000 or 10 percent of the price paid, whichever is higher. The developer must be approved by REGA, and the unit may not be bought with mortgage finance.
The fee is a one-time SAR 4,000. Under Category 1 the residency lasts as long as you keep the property. Under Category 2 it depends on keeping the purchase contract alive and taking ownership within five years. Benefits include living in Saudi Arabia with spouse, parents and children under 25, and exemption from the fees charged on expatriates. The Center notes that all conditions are subject to change.
In practice, foreign buyers fall into three groups. Residents already have a permit and gain the right to buy a home, inside or outside the zones. Non-residents buying below SAR 4 million get an asset and nothing more. Non-residents buying a finished, unmortgaged home worth SAR 4 million or more, or a qualifying off-plan unit, can apply for a residence permit tied to it. Anyone comparing this with Dubai should start from the Saudi threshold of SAR 4 million; The Brief's honest guide to living in Dubai covers the UAE side.
Before you sign
- Check the exact plot or unit on the Saudi Properties portal. "Riyadh" is not a zone. The nine Riyadh zones are.
- Budget up to 7 percent on top of the price in Riyadh, Jeddah, Makkah and Madinah, and 5 percent elsewhere, before brokerage and other costs.
- If you are a non-resident, sort out the digital ID, the Saudi bank account and the Saudi phone number first. Without them you cannot apply.
- If residency is the goal, buy to the Premium Residency rules from the start: a finished, residential, unmortgaged property worth SAR 4 million or more, or a qualifying off-plan unit from a REGA-approved developer. A mortgage disqualifies you.
- Settle the tax position at home before you buy. Whatever Saudi Arabia charges, your country of residence may still tax rent or gains from a Saudi property. As The Brief argued in Zero Tax Is Not Zero Cost, the absence of a local tax says nothing about what you owe elsewhere.
Foreign buyers in Saudi Arabia now work from a published map. It is narrow in the big cities, the entry costs are known, and the line between owning a home and living in it is drawn in the law itself.
Work with Sebastian
If you are weighing a property purchase in Saudi Arabia, whether for a Riyadh posting, a Premium Residency application or as part of a wider Gulf base, and want the ownership structure, residency and home-country tax to fit together, that is the kind of cross-border setup Sebastian works on with internationally mobile clients. Book a consultation.
