As of January 22, 2026, an updated system governing real estate ownership for foreign individuals and legal entities has officially come into force in Saudi Arabia. This system allows foreigners to acquire local real estate.

This is not a full removal of restrictions, but rather an expansion of the market. Following the example of neighboring countries, foreigners are permitted to purchase property only in specifically designated zones.

Below, we will examine what exactly has changed in the rules, how the application process is structured for residents and non-residents, and which restrictions remain in place.

Why Saudi Arabia is opening the market to foreigners

The opening of the real estate market to foreign buyers is part of a long-term economic transformation under the Vision 2030 program. In essence, this government initiative is aimed at reducing the country’s dependence on oil revenues by developing other sectors of the economy, including investment real estate.

The contribution of the real estate and construction sector to the Kingdom’s economy is increasing amid large-scale government and quasi-government projects, ranging from the renovation of central districts of Riyadh to the development of new tourism and business clusters. Allowing foreign participation in these projects is intended to enhance the market’s investment resilience and to expand the pool of long-term property owners.

The scale of interest in the sector is also indirectly confirmed by industry events. For example, during the Real Estate Future Forum in Riyadh, agreements and investment memorandums totaling approximately USD 26.6 billion were signed.

What has changed compared to the previous real estate ownership regime

Before the new rules came into force, foreigners were also allowed to own local real estate. However, the right to purchase was strictly tied to the applicant’s status, the purpose of acquisition, and individual approvals from government authorities.

There were two main scenarios for purchasing property:

  • Through foreign companies registered in the Kingdom. Such companies were allowed to acquire property necessary for conducting business activities, including offices, warehouses, and housing for employees, but only if they held an investment license.
  • Through development projects. In this case, the buyer was required to meet a minimum investment threshold of no less than 30 million Saudi riyals. The project also had to be completed within a period not exceeding five years.

Starting in 2026, a unified legal regime has been introduced, which includes the following elements:

  • Categorical admission of applicants. The right to apply is granted to foreign individuals, both residents and non-residents, as well as to foreign legal entities, including companies without a physical presence in the country.
  • Centralization of procedures. All operations are conducted through a single digital portal administered by the Real Estate General Authority. This means that verification of the applicant’s status, confirmation of the property’s eligibility, and registration of ownership rights are carried out within one system rather than being distributed across multiple government bodies.
  • Zoning. The key filter is no longer the personal profile of the buyer, but the geographical zone and the type of property. A transaction can be completed if the property is located in an approved zone and complies with the established parameters.

Step-by-step process of purchasing real estate in Saudi Arabia

Regardless of the applicant’s status, the transaction is carried out through a government digital platform. Ownership history is formed within this system, and without such registration, property rights are not legally recognized.

The simplest process applies to foreign nationals holding a valid residence permit (iqama). They are required to complete the following steps:

  • Log into the system using their resident identification number.
  • Select a property located within an approved zone.
  • Submit an application for transaction registration.
  • Pay the applicable government fees and complete the registration process.

For this category of buyers, no involvement of diplomatic institutions is required. Processing timelines depend solely on the completeness of the submitted data and the legal status of the property.

For buyers who do not reside in the Kingdom, several additional steps apply:

  • Initial identity verification through a Saudi Arabian diplomatic mission in the country of residence.
  • Obtaining digital access to the government platform.

After these steps are completed, the registration procedure follows the same process as for applicants with resident status.

For legal entities, the key entry requirement is the registration of a company through Invest Saudi. Once registered, the company is assigned a unified identification number, which allows the legal entity to submit applications for real estate acquisition through the government system.

Where foreigners are permitted to purchase property

Saudi authorities officially confirm that foreign ownership rights will depend on a list of geographic zones approved by a separate regulatory act. Publication of this document is expected by the end of the first quarter of 2026.

Riyadh and Jeddah will be subject to separate regulatory regimes, as they function as major hubs for expatriates and international business. As a result, they also carry a social responsibility as key residential markets for Saudi citizens.

The status of Mecca and Medina is regulated separately. Property ownership in these cities is permitted exclusively for Muslims. For non-Muslims, any form of ownership is prohibited regardless of residency status or corporate structure.

Cost of market entry in Saudi Arabia

The opening of the Saudi real estate market to foreigners is accompanied not only by expanded ownership rights but also by the introduction of additional fiscal obligations. The key new measure is an additional fee applied upon the transfer of ownership to a foreign buyer. This fee may reach up to 5 percent of the transaction value. This payment:

  • is charged in addition to standard registration procedures;
  • directly affects both entry and exit pricing of the asset;
  • is economically comparable to an “entry tax” applied in several other Middle Eastern jurisdictions.

In addition to the 5 percent fee, the effective transaction cost for a foreign buyer includes:

  • government registration fees;
  • legal due diligence and zoning compliance costs;
  • notary and translation services, particularly in cross-border transaction structures;
  • potential expenses related to corporate registration for legal entities without an existing presence in the Kingdom.