Saudi New Property Ownership Law For Foreigners
Saudi Arabia has published the complete text of a comprehensive new law that governs non-Saudi real estate ownership, providing full details about the Saudi New Property Ownership Law for Foreigners and indicating a significant change in the Kingdom’s property laws.
The Cabinet approved the law earlier this month and officially published it in the Umm Al-Qura Gazette on Friday. It will take effect 180 days after it is published. Increased ownership rights for non-Saudis
The new law gives non-Saudis, including private citizens, businesses, and nonprofit organizations, the ability to own or acquire real estate in areas that will be determined by the Cabinet. These rights include leaseholds, ownership, usufruct (the right to use and benefit from property), and other real estate interests, according to the Saudi Gazette. However, a number of restrictions will still apply to ownership, depending on the location, type of property, and intended use. Madinah and Makkah are still under restrictions.
Even though the new rule makes real estate more accessible, it still expressly forbids foreign ownership in some places, most notably Makkah and Madinah, unless there are special circumstances for individual Muslim owners. All non-Saudi entities are now subject to a single regulatory framework after the previous prohibition on GCC nationals owning real estate in these cities was lifted.
Who Will Implant This Orders
According to a key clause in the law, the Council of Ministers is tasked with deciding which geographic areas will allow foreign ownership, working with the Real Estate General Authority, and receiving approval from the Council of Economic and Development Affairs.
Regulations for corporate entities and foreign residents
One residential property for personal use may be owned by foreign nationals who are lawfully residing in Saudi Arabia, as long as it is not in a restricted area. This clause does not apply to Madinah and Makkah. Regarding corporate ownership, the law permits licensed investment funds, special-purpose entities, and non-listed companies with foreign shareholders to own real estate anywhere in the Kingdom, including in the holy cities, provided that the property is used for employee housing or operational purposes.
As long as they abide by the current rules set forth by the Saudi Capital Market Authority, listed businesses and investment vehicles are also permitted to purchase real estate. Subject to Ministry of Foreign Affairs approval and reciprocity requirements with the respective nations, diplomatic missions and international organizations will be allowed to own property for official purposes and representative housing.
Registration Is Mandatory
Before purchasing real estate, the new framework requires all non-Saudi entities to register with the appropriate authority. Ownership or usufruct rights will only become legally valid after registration in the national real estate registry.
Penalties and violations
The law establishes a rigorous enforcement system. Fines for violations can reach SR10 million. Authorities may mandate a forced sale of the property in situations involving false information, with the state receiving the proceeds after deductions.
The Real Estate General Authority has a special committee that will look into violations and apply sanctions. Within sixty days, committee decisions may be challenged in administrative court.
