The Kingdom of Saudi Arabia has enacted significant reforms to its real estate ownership framework through the new Law of Real Estate Ownership and Investment by Non-Saudis promulgated by Royal Decree No. M/14 dated 19/1/1447H (the new Law) and the accompanying Capital Market Authority controls (CMA Controls), both of which took effect on January 22, 2026.
These developments represent a landmark shift in Saudi policy, aligning with Vision 2030’s objective of attracting foreign investment and facilitating economic diversification. Collectively, they will reshape how non-Saudis may acquire and hold real estate in the Kingdom, including the historically restricted holy cities of Makkah and Madinah.
The Law establishes a comprehensive framework governing non-Saudi ownership of real estate in the Kingdom. Under the new Law and CMA Controls, the following categories may acquire real estate in Makkah and Madinah:
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Category |
Geographical Restrictions |
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Natural Persons Muslim and non-Muslim |
Foreign persons who reside in Saudi Arabia may own a personal residence except in Makkah, Madinah, and any excluded areas designated by the Council of Ministers. Muslim persons may own real estate throughout Saudi Arabia, including Makkah and Madinah. |
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Foreign Owned Private Companies Companies incorporated in Saudi Arabia under the Companies Law with 100% foreign ownership |
Subject to the additional controls to be issued by the Council of Ministers, may own real estate throughout the Kingdom. |
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Publicly Listed Companies Companies incorporated in Saudi Arabia under the Companies Law and listed on the Tadawul |
If non-Saudi ownership exceeds 49%, any real estate acquired within Makkah and Madinah must be allocated for and used as headquarters or the headquarters of their branches. If non-Saudi ownership is 49% or less, real estate may be acquired within Makkah and Madinah for other purposes. |
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Investment Funds and Special Purpose Entities (Asset Custodians) Funds and SPEs established in Saudi Arabia and licensed/registered with the Capital Markets Authority |
No restrictions. CMA-licensed fund managers may accept subscriptions from natural and legal persons who do not hold Saudi nationality in investment funds that invest part or all of their assets in Saudi real estate, including Makkah and Madinah. |
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Diplomatic Missions / International and Regional Organizations |
Ownership of real estate for personal residence and headquarters by diplomatic missions are subject to reciprocity of such ownership in home country. International and regional organizations must obtain approval from the Ministry of Foreign Affairs. |
Non-Saudi companies must first register with the Ministry of Investment before acquiring any real estate in Saudi Arabia. Such registration must be periodically updated (e.g., material change in ownership), and any failure to do so will be subject to a fine up to SAR1 million.
Ownership of and rights over real estate only become effective upon registration in the real estate registry maintained by the Real Estate General Authority (REGA).
Real estate disposals by non-Saudis are generally subject to a fee of up to 5% of the transaction value. However, the draft implementing egulations contemplate a lower fee of 2.5% of transaction value for the disposal of residential real estate and 0% of transaction value for the disposal of agricultural, commercial, and industrial real estate (except within any economic city or special economic zone where a fee of 2.5% of transaction value applies to the disposal of any agricultural, commercial, and industrial real estate within those cities and zones).
These fees are in addition to the already applicable 5% real estate transfer tax that applies to the transfer of any real estate in the Kingdom, subject to available exceptions.
The implementing regulations to the law were published in 2025 for public consultation but the final version of the regulations is yet to be published. Critically for foreign investment, the new Law also contemplates a resolution to be issued by the Council of Ministers, which will stipulate:
The parameters of these additional controls will be key to understanding the full extent of market liberalization.
These regulatory developments represent a significant liberalization of Saudi Arabia’s real estate market and reflect the Kingdom’s commitment to attracting foreign investment in support of Vision 2030. Foreign investors should assess their investment strategies in light of these expanded opportunities, particularly for real estate located in Makkah and Madinah. For more information on main market access for foreign investors, please see this Latham Alert.
For further advice on structuring investments in Saudi real estate and navigating the regulatory approval processes, please contact either of the authors listed below.