Saudi Arabia is entering a new historical phase in its real estate and investment sector, with the implementation of the system allowing foreign ownership of real estate and the acquisition of property rights within the Kingdom, effective tomorrow, January 1, 2026. This step culminates a series of legislative and economic reforms the country has witnessed in recent years.
Vision context and economic transformation
The activation of this system is an integral part of the objectives of "Saudi Vision 2030," which aims to diversify national income sources and attract foreign direct investment. Opening the door to foreign property ownership is a strategic step to enhance the Kingdom's position as a global investment destination. This decision is expected to inject significant liquidity into the real estate market, increase the sector's contribution to the GDP, and stimulate a competitive environment in the construction and real estate development sectors.
System details and targeted areas
According to statements by the Minister of Municipalities and Housing, Majid Al-Hogail, the new system takes into account the balance between attracting investment and preserving the unique characteristics of certain major cities. He explained that foreign ownership in the commercial, industrial, and agricultural sectors will be available in all cities of the Kingdom without exception, thus supporting the business environment for international companies.
Regarding residential properties, the regulations stipulate that four major cities are exempt from open ownership: Mecca, Medina, Jeddah, and Riyadh. However, the minister noted that there are specific areas within these cities where ownership is permitted, thus providing diverse options for residents and investors.
Special regulations for Mecca and Medina
The system grants special religious and regulatory privileges to the cities of Mecca and Medina. Non-Saudi (Muslim) residents are permitted to own one residential property within these two cities, subject to specific regulations. Regarding companies, the system allows companies listed on the Saudi Stock Exchange and investment funds to own real estate throughout the Kingdom, including the Two Holy Mosques, in accordance with regulations issued by the Capital Market Authority in coordination with relevant authorities.
Fees and penalties
The regulations stipulate a fee not exceeding 5% of the value of real estate transactions by non-Saudis. To ensure transparency and compliance, the regulations specify strict penalties for violators, including fines of up to 10 million riyals for providing misleading information, with the possibility of court-ordered sale of the property. The regulations also require all non-Saudi entities to register with the relevant authorities to guarantee the legality of their ownership.
This system is expected to increase the stability of highly skilled residents and support the housing sector, in which the Kingdom aims to raise the rate of citizen ownership to record levels that have exceeded previous targets.
