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July 30, 2025
Introduction: Why Saudi Arabia’s New Property Law Matters
Understanding the 2025 Foreign Property Ownership Law
Who Can Own Property in Saudi Arabia? Eligibility Explained
Which Areas Are Open for Foreign Property Ownership?
Legal Procedures & Licensing for Property Purchase
Key Restrictions & Compliance for Foreign Buyers
Investment Benefits of Owning Property in Saudi Arabia
High Rental Yields
Capital Appreciation Potential
Tax Benefits & Legal Protections
Financing Options: Islamic-Compliant Mortgages & Payment Plans
Real Estate Sectors Booming Under the New Law
Residential (Apartments, Villas, Compounds)
Commercial (Offices, Retail)
Tourism & Hospitality Developments
Comparison Table: Saudi vs UAE Foreign Ownership Laws
Challenges Foreign Investors Should Be Aware Of
Step-by-Step Guide to Buying Property as a Foreigner in Saudi Arabia
How This Law Impacts Saudi Arabia’s Vision 2030 Goals
Expert Tips for First-Time Foreign Property Investors
Conclusion
Frequently Asked Questions (FAQs)
Saudi Arabia’s business environment is evolving, and at the heart of this transformation is the 2025 Property Ownership Law for Foreigners. For the first time, non-Saudis can legally own real estate within specific zones across the Kingdom. This landmark reform is part of Saudi Arabia’s broader push to diversify its economy, attract foreign investment, and develop world-class urban ecosystems.
From global investors to expatriate professionals, the new law opens doors to participate in Saudi’s thriving real estate market, offering opportunities for both residential and commercial ownership. It signals Saudi’s readiness to compete with global real estate hubs like Dubai, Singapore, and London.
The new law is structured to allow foreign individuals and companies to purchase, own, and develop property within designated areas. Key highlights include:
Ownership rights for non-Saudis in both residential and commercial real estate
Special provisions for Premium Residency holders (Green Card equivalent)
Foreign companies with Saudi branches can now own operational premises
Compliance with Shariah principles in financing and transactions
Restrictions apply to holy cities (Mecca & Medina)—no foreign ownership allowed
This is a regulated pathway for foreigners to invest in Saudi Arabia’s booming real estate sector, providing transparency and security.
Under the 2025 law, the following entities are eligible to own property:
Foreign individuals holding Premium Residency (Iqama Muqeem Mustathmir)
Non-resident foreigners (subject to project-based approvals)
Foreign businesses registered and licensed to operate in KSA
GCC citizens and companies with relaxed regulations
Foreign investment firms approved by MISA (Ministry of Investment Saudi Arabia)
Saudi Arabia has specified zones for foreign ownership to ensure strategic urban growth and market stability.
| City | Areas Open for Foreign Ownership |
|---|---|
| Riyadh | Diplomatic Quarter, King Abdullah Financial District, North Riyadh |
| Jeddah | Corniche Waterfront, Jeddah Downtown, Obhur District |
| Dammam/Khobar | Al Aqrabiyah, Seafront Developments |
| NEOM | All investment sectors, including The Line and Oxagon |
| Red Sea Project | Residential & hospitality developments in tourism zones |
Properties in Mecca and Medina remain restricted to Saudi citizens.
The property purchase process for foreigners involves several steps:
Eligibility Verification via MISA and relevant authorities
Property Search within approved zones through licensed brokers
Due Diligence & Contract Drafting with legal advisors
SAMA-compliant financing approval (if using Islamic mortgage)
Property Registration with the Ministry of Justice & Real Estate Registry
Issuance of Title Deed (Sak) under foreign ownership status
The process is transparent, regulated, and takes 45–90 days depending on approvals.
While the law is progressive, foreign ownership is bound by strict compliance rules:
No ownership of properties near military or strategic zones
Ownership of land plots for development requires project proposals
Investment-based minimum property value thresholds (usually SAR 1M+)
For companies, property use must align with licensed business activities
High Rental Yields (6–9%) in key urban districts
Strategic property appreciation amid Vision 2030 infrastructure boom
Legal protection through digitized property registries
No property tax for individuals (as of 2025)
Eligibility for business incentives under local Saudization initiatives
For expats, it offers residency stability, passive income, and long-term capital gains.
Saudi banks now offer Shariah-compliant home financing (Murabaha & Ijara models) for foreigners:
| Financing Type | Key Features |
|---|---|
| Murabaha | Bank purchases property & sells to buyer at profit margin |
| Ijara | Lease-to-own model with gradual equity build-up |
| Developer Installments | Pay-over-period plans directly through real estate developers |
Documentation is streamlined through Tamweel platforms integrated with SAMA guidelines.
Residential Compounds: High-demand among expats, rental yields up to 8%
Luxury Apartments: Popular in Riyadh’s Diplomatic Quarter, with capital gains potential
Commercial Spaces: Retail & office spaces in KAFD, perfect for international businesses
Tourism Developments: Ownership opportunities in Red Sea luxury resorts
| Factor | Saudi Arabia (2025) | UAE (Dubai/Abu Dhabi) |
|---|---|---|
| Foreign Ownership Zones | Select areas across major cities | Freehold zones (Dubai/Abu Dhabi islands) |
| Eligibility | Premium Residency, Foreign Businesses | Open to all foreigners |
| Financing Availability | Islamic Mortgages (Murabaha, Ijara) | Islamic & Conventional Mortgages |
| Taxes on Property | No personal property tax | 4% Transfer Fee (Dubai) |
| Ownership Restrictions | Restricted in Mecca & Medina | No restrictions |
Regulatory changes: Monitor future updates on foreign ownership laws
Processing Timeframes: Transactions may take longer than in UAE
Liquidity Constraints: Early-stage market may lack quick resale options
Cultural Adaptation: Important for long-term residents and family investors
Documentation Complexity: Arabic-language contracts require professional review
Obtain or validate Premium Residency (or MISA license)
Hire a licensed real estate advisor in Saudi Arabia
Shortlist properties in approved zones
Apply for Shariah-compliant financing (optional)
Draft and review Sale & Purchase Agreement (SPA)
Conduct property inspection & due diligence
Register the property with Saudi Real Estate Registration
Receive Title Deed (Sak) with foreign ownership status
This law directly supports Vision 2030 by:
Enhancing foreign capital inflow into real estate
Creating sustainable urban housing models
Encouraging global companies to establish operational HQs in Saudi
Boosting tourism infrastructure development in Red Sea, NEOM, and other mega projects
Prioritize income-generating assets (apartments, retail units)
Consider co-investment models in REIT structures for diversification
Work with bilingual legal advisors experienced in foreign transactions
Align investments with Vision 2030-focused zones (NEOM, KAFD, Red Sea)
Always check for official property approval listings to avoid legal issues
Saudi Arabia’s New Foreign Property Ownership Law marks a monumental shift in how the Kingdom engages with global investors. For those seeking Shariah-compliant, secure, and high-growth real estate opportunities, Saudi Arabia now rivals global investment destinations.
With proper due diligence, legal guidance, and alignment with Vision 2030 initiatives, foreign property investors can unlock significant value in Saudi Arabia’s dynamic real estate sector.
Can foreigners own property in Mecca or Medina?
No, ownership is restricted to Saudi citizens.
Do I need Premium Residency to buy property?
Yes, for individuals. Foreign companies need to be MISA-licensed.
Are Islamic mortgages available for foreigners?
Yes, via Murabaha and Ijara models.
Is property tax applicable in Saudi Arabia?
No property tax for individuals as of 2025.
Can foreign companies own commercial properties?
Yes, if they are registered and licensed under Saudi laws.
Diversifies economy away from oil dependency
Attracts global real estate investors and multinational companies
Encourages urban development through private sector participation
Supports tourism sector growth through foreign-owned hospitality assets
Focus on Vision 2030 cities (NEOM, Red Sea, Riyadh North)
Work with bilingual legal advisors
Prefer income-generating assets (apartments, retail)
Ensure alignment with MISA sector-specific licenses for businesses
Opt for developer-backed installment plans if mortgage complexities arise
From securing an audited company profile, handling all document attestations, and obtaining approvals from MISAto issuing your Commercial Registration, we handle the entire business setup — quickly, efficiently, and without hassle.
1. We Understand the Process, So You Don’t Have To
Navigating the regulations in Saudi Arabia can be complex. That’s why our experts handle all the paperwork, approvals, and formalities on your behalf.
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