Executive Regulations for the Freehold Property Ownership System for Non-Saudis

The General Real Estate Authority in the Kingdom of Saudi Arabia has unveiled the draft of the new executive regulations for the system of non-Saudis owning real estate, which represents an advanced regulatory step aimed at attracting foreign investments and regulating ownership mechanisms to achieve balance in the real estate market.

According to the draft, the new system will come into effect in January 2026, after being issued by Royal Decree and published in the Official Gazette. It consists of 15 main regulatory articles covering ownership conditions, eligible categories, permitted geographical areas, and penalties for violations.

Basic conditions for non-Saudi individuals to own property:

Valid ID: Either a legal residency permit or a digital ID issued via the "Absher" platform for irregular residents.

Saudi contact number: Registered in the name of the ID holder.

Bank account within the Kingdom: A mandatory requirement to complete transactions.

Conducting financial transactions electronically: Through approved payment methods in the Kingdom.

ID verification: Owner identity must be verified at every real estate transaction.

Conditions for property ownership by foreign companies:

• Registration with the Ministry of Investment
• Valid ID for the legal representative
• Full disclosure of direct and indirect owners
• Opening a bank account in the company's name within Saudi Arabia

The regulations include strict penalties in case of violations, including fines of up to 10 million riyals, with the possibility of selling the violating property by court order.

Eligible categories for property ownership:

• Non-Saudi individuals (residents or non-residents).
• Foreign companies and non-profit institutions.
• Saudi companies with non-Saudi shareholders.
• Investment funds and special purpose entities (according to specific regulations).

Geographical scope of ownership:

The Council of Ministers determines the areas where ownership is permitted, and a detailed document will be published later including major cities such as Riyadh and Jeddah.

On the other hand, ownership is prohibited in Mecca and Medina for non-Muslims, with special regulations imposed, and ownership is also prohibited in border areas and some sensitive locations.

Financial and regulatory controls:

• Full disclosure of data upon purchase.
• Registration of ownership in the unified real estate registry.
• Imposing fees and a real estate transaction tax of up to 10%.
• Ownership does not grant additional privileges beyond what is stipulated in general regulations.

Types of ownership allowed:

• Full freehold ownership.
• Real rights such as usufruct and easement rights according to regulations.

Non-Saudi individuals are allowed to own one residential property outside the prohibited areas, with the exception of Mecca and Medina, where ownership is only allowed for Muslims.

As for companies listed on the stock market, they are permitted to own property even in Mecca and Medina, according to the regulations of the Capital Market Authority.

Governance and implementation:

The new system aligns with Saudi Vision 2030 and aims to create an attractive investment environment by regulating the real estate market and opening the door to foreign capital under precise controls.

The final executive regulations and the electronic application platform are scheduled to be issued within no more than 180 days from the publication of the system.

Exceptions:

• The system does not cancel rights acquired under previous regulations such as the Special Residency System or privileges for citizens of Gulf Cooperation Council countries.
• Diplomatic missions and international organizations are allowed to own property for housing and work purposes based on reciprocity and in coordination with the Ministry of Foreign Affairs.

A qualitative leap in the real estate sector...

This system represents a radical transformation in Saudi real estate policy, as it provides foreign investors with a clear and advanced legal framework, while enhancing the protection of citizens' interests and supporting the national economy by enabling the market to grow within an organized and transparent environment. 

Edited by: Imtilak Global©