Saudi Arabia law change opens door to foreign property ownership  

The Law of Real Estate Ownership by Non-Saudis was issued by Royal Decree No. M/14 of July 2025, and will come into force in January 2026. Replacing the previous 2000 law, it permits foreign individuals, companies and investment funds to acquire property and rights ‘in rem’ within designated geographic zones across the Kingdom.

This marks a significant shift in ownership policy, particularly in areas that were previously restricted, as the country looks to diversify beyond oil and increase development and investment into the Kingdom.

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Philip Corfield-Smith, property expert with Pinsent Masons in the Middle East, said: “This framework law represents an excellent initial step toward encouraging foreign ownership and participation in Saudi Arabia’s real estate market.

“At the same time, it incorporates safeguards to prevent speculative investment in areas outside the designated geographic zones, ensuring that national housing objectives remain a priority alongside international investment.”

Notably, the law will also allow non-Saudi Muslims to own property within the holy cities of Makkah and Madina, subject to specific conditions. This represents a historic change in access to real estate in some of the country’s most sensitive and previously exclusive regions.

The move aligns with the broader objectives of Vision 2030, Saudi Arabia’s national transformation programme aimed at diversifying the economy beyond oil. The real estate sector is a key pillar of this strategy, with major emphasis on attracting foreign investment to support the country’s ‘giga projects’ and redevelopment initiatives in cities such as Jeddah and Riyadh.

The new law - which will come into effect on 21 January 2026 - will allow foreign persons to own property in the country for commercial, residential or operational purposes within designated geographic zones. In limited cases, foreign residents may also be allowed to own one residential property outside of these designated geographic zones.

The law also brings Saudi Arabia’s property ownership framework closer into line with others in the wider Gulf Cooperation Council (GCC) region, particularly around expanding access for non-citizens and foreign entities.

Saleh bin Abadi, real estate expert at Pinsent Masons, said: “By opening the market to non-Saudis —individuals, companies and non-for-profit entities — the new law reflects a bold commitment to inclusivity and diversification.

“It strengthens the Kingdom’s investment landscape across all sectors and supports the diversification of non-oil sector to the economy and the realisation of Vision 2030 by expanding access and confidence in the Saudi market.”