Saudi Arabia Opens Property Market to Foreign Buyers in 2026

The Kingdom of Saudi Arabia is set to formally open parts of its real estate market to foreign buyers this January. This move is set to commence as a long-anticipated law allowing non-Saudis to own property in designated areas of the Kingdom comes into force, marking a historic moment for the country’s property market.

To highlight, the Law on Non-Saudis’ Ownership of Real Estate, approved by royal decree in 2025 and published in the official gazette in July 2025, will take effect on January 21 following a six-month transition period. As the Saudi Arabia property market opens to foreigners, this represents one of the most significant reforms to Saudi Arabia’s property sector in decades, aligning closely with its Vision 2030 strategy to diversify the economy and attract foreign investment.

Market participants have closely followed the legislation’s progress, with expectations building that the Kingdom would gradually align with other Gulf markets that allow foreign property ownership. While limited forms of foreign investment in Saudi real estate have existed since 2000, the new Saudi Arabia foreign property ownership law replaces the previous framework with clearer rules, broader eligibility, and stricter oversight.

Exploring Saudi Arabia’s New Property Law 2026

Under the new system, based on recommendations from the Kingdom’s Real Estate General Authority (REGA), foreign individuals and entities may now own, lease, or hold other rights over property located within designated zones to be approved by the Council of Ministers. Although the zones where you can buy property in Saudi Arabia as a foreigner have yet to be officially announced, they are widely expected to include select areas in Riyadh, Jeddah, and parts of the Eastern Province.

Outside these zones, foreign ownership remains restricted, with limited exceptions. The law permits non-Saudis to acquire residential, commercial, industrial, and agricultural properties within approved areas. Foreign residents may also own one personal residence outside the zones, excluding the holy cities of Mecca and Medina.

Indeed, restrictions in Mecca and Medina remain largely unchanged as ownership in the two holy cities continues to be limited to Muslims and subject to specific conditions, with foreign companies generally barred except in narrowly defined operational cases. Non-residents, however, are limited to ownership within Saudi Arabia real estate designated zones only.

Fees and Strict Enforcement Rules

The legislation introduces new fees and compliance requirements. Transactions involving non-Saudis are subject to a 5% real estate transfer tax, alongside additional fees that could raise total costs to as much as 10%. Certain investment activities are also subject to a minimum threshold of SAR 30 million ($8 million), signaling a focus on long-term capital rather than speculative investment.

A stricter enforcement regime has also been introduced, with fines of up to SAR 10 million for violations, including the provision of false information or ownership in prohibited areas, and the potential forced sale of properties acquired unlawfully. Oversight is vested in a specialized committee under REGA, with decisions subject to appeal before the administrative courts.

Perks for Corporations and Institutions

Foreign companies, investment funds, and non-profit organizations are set to benefit significantly from Saudi Arabia’s new real estate ownership framework, with both listed and unlisted entities allowed to acquire property in designated zones for operational needs such as offices, industrial facilities, and employee housing.

Saudi-listed firms with foreign ownership may own property nationwide, including in Mecca and Medina, subject to Capital Market Authority rules. Meanwhile, unlisted companies with foreign shareholders are permitted to buy property within approved zones and, in certain cases, beyond them. The law also allows diplomatic missions and international organizations to own premises for official use, subject to Ministry of Foreign Affairs approval and reciprocity agreements.

Impact on Saudi Arabia’s Property Market

The reform comes amid strong momentum in Saudi Arabia’s property market. The non-oil economy accounted for 56% of GDP in 2025, supporting demand across multiple property market segments, including real estate, office, retail, hospitality, and industrial units. Presently, the Kingdom’s development pipeline is valued at around $440 billion in committed projects and $1.55 trillion for the future long term.

At the moment, Saudi Arabia’s future real estate supply is led by giga-projects such as NEOM, Diriyah, and the Red Sea developments, while near-term market activity has been concentrated in Riyadh, supported by the Regional Headquarters program. Additionally, office demand in the capital remains robust, with Grade A rents rising 15% year-on-year in 2025 and occupancy nearing 98%, alongside an 18% quarter-on-quarter increase in residential transaction values to SAR 7.7 billion in the third quarter.

Market momentum has been reinforced by regulatory measures, including the expansion of the White Land Tax and a five-year rent freeze in Riyadh to improve affordability. All in all, the rising activity in Riyadh, driven by government initiatives and the opening of the market to foreign buyers, is expected to further reshape the Kingdom’s real estate landscape.

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