Saudi Arabia has recently taken a landmark step in reforming its foreign ownership regulations, particularly regarding real estate, reflecting its broader economic diversification goals under Vision 2030. In early July, the Saudi Cabinet approved a new property ownership law that significantly expands the rights of foreign individuals and entities to own real estate in the Kingdom.

Saudi Arabia has previously implemented specific policies regarding foreign ownership of real estate, allowing such rights only under certain categories and conditions. While there have been limitations for foreign nationals and companies, ownership has been permitted in select instances, including:

• Premium Residency holders, who could own real estate for residential, commercial, and industrial purposes outside the holy cities of Mecca and Medina, with usufruct rights allowed within these cities for up to 99 years.
• Licensed foreign developers operating under specific approvals.
• Foreign investors with residency permits, subject to Ministry of Interior licensing.
• Indirect ownership through real estate funds or shares in listed Saudi companies.
• GCC nationals and companies, who enjoyed ownership rights similar to Saudi nationals, including land ownership subject to development conditions.

These rules were designed to protect national interests and control the real estate market while allowing limited foreign participation aligned with economic and social priorities.

The 2025 property ownership law: Key features and innovations

The new property ownership law, effective January 2026, marks a historic shift by broadening foreign ownership rights within a structured and regulated framework. The law is aligned with Saudi Arabia’s Vision 2030, aiming to boost foreign direct investment (FDI), increase real estate supply, and stimulate economic growth.

Geographic scope and zones

• Designated zones: Foreign individuals and entities will be permitted to acquire real estate in specified geographic zones, with Riyadh and Jeddah explicitly referenced as initial hubs.
• Mecca and Medina: Ownership in these holy cities remains subject to additional regulatory controls due to their religious significance.
• The Real Estate General Authority (REGA) is tasked with defining these zones and issuing executive regulations within 180 days of the law’s publication.

Ownership rights expansion

• The law allows non-Saudis (individuals and legal entities) to own real estate outright in designated areas.
• It complements existing permissions (such as Premium Residency and GCC ownership rights) rather than replacing them.
• Foreign companies can own property necessary for commercial operations, including offices and employee housing, subject to licensing and regulatory approvals.
• Foreign investors engaging in property development must meet investment thresholds (e.g., minimum investment of SAR30 million) and development deadlines (completion within five years). 

Regulatory and procedural controls

• The law introduces strict procedural controls to safeguard Saudi citizens’ interests and ensure market balance.
• REGA will publish detailed executive regulations on the “Istitlaa” public consultation platform, specifying:
  • Eligible zones for foreign ownership.
  • Application and eligibility criteria.
  • Compliance and enforcement mechanisms.
• The law ensures alignment with other frameworks, including the Premium Residency Law and existing GCC ownership rules.

Strategic objectives

• Attract foreign direct investment by opening the real estate market to global investors and developers.
• Increase real estate supply and housing availability to meet growing demand.
• Support economic diversification away from oil dependency as part of Vision 2030.
• Enhance market regulation to protect national interests and maintain social balance.

Implications for foreign investors and the Saudi real estate market

The new law is expected to transform Saudi Arabia’s real estate landscape by:

• Facilitating foreign participation in a high-growth sector, attracting international capital and expertise.
• Encouraging institutional investment and large-scale development projects.
• Boosting liquidity and supply in key urban centers, supporting housing and commercial infrastructure needs.
• Enhancing transparency and regulatory clarity through detailed executive regulations and public consultations.
• Maintaining cultural and social sensitivities by imposing special conditions on ownership in Mecca and Medina.

Expanding access for long-term expats

Faisal Durrani, partner – head of Research, Knight Frank MENA, shared with Economy Middle East, that, The changes that were announced in Saudi Arabia last week were long anticipated and are a key part of Vision 2030, so it hasn’t come as a surprise. One of the goals under Vision 2030 was to provide world-class housing to Saudi nationals, with a benchmark target of achieving a 70 percent homeownership rate by 2030. We are currently sitting in the mid-60 percent range, so the Kingdom is well on its way to achieving that target.” 

Another pillar of Vision 2030 is to boost inward foreign direct investment into the Saudi economy and the real estate market, and one way to achieve that is by opening the door to international investors and purchasers, Durrani further noted.

“We are still awaiting the fine print of the law change, but from what we understand of what’s been publicly announced, it will be confined to specific investment zones or neighbourhoods in Riyadh and Jeddah. There will also be special rules governing international property ownership in the holy cities of Makkah and Madinah.”

Durrani emphasized that the new law is just another route for international buyers and investors, as they can already access the real estate market in Saudi Arabia.

“Expats living and working in the Kingdom long term are able to purchase a home, with some conditions attached: they must live in it and they must sell it should they decide to leave the Kingdom.” 

Boosting investment activity

Durrani also mentioned that last January, new premium residency visa options were introduced, one of which was directly tied to property ownership. 

“The conditions attached were quite stringent: a minimum purchase value of SAR4 million, the property must be completed, and there must be no mortgage or debt on it. 

However, one of the key changes that we noted in that premium residency visa is that it didn’t specify that it needed to be a single property – in fact, it said “properties.” So for the first time, the door was opened to international investors to buy real estate in Saudi as buy-to-let investors, across all sectors. However, with that high price threshold and the other conditions attached, the pool was quite limited.” 

The latest announcement to allow international investors greater access builds on these existing rules and regulations, and it is expected to boost activity within these investment zones, Durrani stated.

“It’s a tentative step in the direction of opening the market up and it mirrors what was done in Abu Dhabi and Oman when those two markets were first opened to international buyers through specific investment zones.”

Integration with broader investment reforms

The property ownership law complements other recent reforms, notably the Updated Investment Law of February 2025, which unified investment frameworks for Saudi and foreign investors, streamlined licensing, and enhanced investor protections. Together, these reforms create a more attractive and competitive environment for foreign direct investment across sectors.

Harmen de Jong, regional partner, Strategy & Consulting, Knight Frank KSA, highlighted that, ”the acceleration of house prices in the Kingdom over the last 5 years has been exceptional with prices for apartments in Riyadh, for instance, up by nearly 82 percent since 2019. Salaries have not risen by a commensurate level and this, combined with rising demand for rental accommodation has begun to slow the rate of increase in home values. The decision to allow international buyers access to real estate markets in the Kingdom in specific investment zones is likely to be confined to the major giga projects, which will have the impact of creating a two-tiered market – one for international buyers and one for domestic buyers. 

“As a result, prices within giga projects are likely to accelerate faster than the rest of the more mainstream market,” de Jong added. 

Balancing global talent and localization

Talking about the potential impact on the Kingdom’s employment landscape and the demand for skilled talent, Khurram Shehzad, director of PROVEN Solution, told Economy Middle East, “It’s a landmark policy shift there is no question, and so what we are likely to see is not a single wave of opportunity, but instead layered catalysts across multiple sectors. Short term, there will be a sharp uptick in demand for technical talent, especially those with experience in large-scale and luxury developments.”

He explained that, “As new residential and commercial zones come online, this will naturally extend to skilled construction labor, building systems specialists, and logistics personnel. But the implications go well beyond construction. This policy itself acts as an invitation to the world to participate in the Kingdom’s urban future, so there should be even more demand across real estate advisory, legal services, investment management, etc. Those with a grasp of Shariah-compliant real estate law will be particularly valuable.”

“But all of this comes with two macro pressures. First, the need to attract niche global talent in relevant areas. Second, the urgency to localize expertise as Saudization continues to be a national priority. To reconcile these, we will need more strategic partnerships between government, academia, and the private sector to build sector-specific training pathways that are globally competitive and locally rooted,” he further emphasized.

Frequently asked questions (FAQs)

When does the new foreign property ownership law take effect?

 The law will come into force in January 2026, following its publication in the official Umm al-Qurā Gazette.

Which areas in Saudi Arabia can foreigners own property under the new law?

Foreign ownership is permitted in designated zones, initially including Riyadh and Jeddah. Ownership in Mecca and Medina is allowed under additional regulatory conditions.

Are there investment thresholds or conditions for foreign property ownership?

Yes. Foreign companies investing in property development must invest at least SAR30 million and complete development within five years. Ownership for commercial operations requires relevant licensing.

How does this law affect GCC nationals?

GCC nationals retain ownership rights similar to Saudi nationals, subject to development and utilization conditions, and are not directly impacted by the new law.

What regulatory body oversees the implementation of the new law?

The Real Estate General Authority (REGA) is responsible for defining ownership zones and issuing executive regulations, which will be published for public consultation on the Istitlaa platform.

How does this law align with Saudi Arabia’s Vision 2030?

It supports Vision 2030 by attracting foreign investment, diversifying the economy, increasing housing supply, and developing the real estate sector as a key growth area.

Final word

Saudi Arabia’s 2025 property ownership law represents a transformative policy shift, opening the Kingdom’s real estate market to broader foreign ownership within a carefully regulated framework. By enabling non-Saudis to own property in designated zones and aligning with wider investment reforms, the law aims to attract international capital, stimulate economic diversification, and address housing demand. The forthcoming executive regulations and public consultations will provide further clarity, but the direction is clear: Saudi Arabia is positioning itself as a more open and competitive real estate investment destination in the Middle East.