KUALA LUMPUR - Saudi Arabia has introduced a new legal framework allowing foreigners to own real estate in the Kingdom from January 2026, marking a significant shift in long-standing property ownership rules.

The law permits foreign ownership of residential, commercial, industrial and agricultural properties under specific conditions, while maintaining restrictions in selected cities.

As of 2025, Saudi Arabia is home to an estimated 9.0 to 9.3 million Asia-Pacific citizens, led by around 2.59 million Bangladeshis, followed by about 2.31 million Indians, 2.23 million Pakistanis, nearly 900,000 Filipinos, and roughly 600,000 Indonesians and Nepalis combined.

Announced earlier by Minister of Municipalities and Housing Majed Al Hogail, the reform sets clear limits on where and how non-Saudis may own property.

Residential ownership by foreigners is allowed in most Saudi cities, with exceptions in Makkah, Madinah, Jeddah and Riyadh.

Under the law, foreign residents living in Saudi Arabia may own one residential property outside designated ownership zones, excluding Makkah and Madinah.

Ownership in the two holy cities remains restricted to Muslims only.

Non-resident foreigners may own residential property solely in areas specifically approved by the authorities.

These designated zones will be determined by the Council of Ministers based on recommendations from the Real Estate General Authority and approval by the Council of Economic and Development Affairs.

For commercial, industrial and agricultural properties, the law allows foreign ownership in all cities without exception.

The provision applies to both individuals and companies, signalling broader access for foreign investment and business activities.

Non-listed companies with foreign ownership may own property within approved zones, including in Makkah and Madinah, if they are established under Saudi company law.

Such companies may also own property outside those zones for business operations or employee housing, as defined by regulations.

Listed companies, investment funds and special-purpose entities are permitted to own property across the Kingdom, including the holy cities.

Their ownership will be subject to controls issued by the Capital Market Authority in coordination with the Real Estate General Authority and other regulators.

The law makes registration mandatory for all non-Saudi individuals and entities, with ownership legally recognised only after registration in the Real Estate Registry.

Foreign property transactions will be subject to a fee of up to 5 per cent of the property value, with detailed terms outlined in the executive regulations.

Authorities clarified that foreign ownership does not grant rights beyond those defined by law and does not affect benefits under other frameworks such as the Premium Residency Programme or GCC agreements.

Violations may result in warnings or fines, while submitting false information can lead to penalties of up to SR10 million and, in some cases, a court-ordered sale of the property.