Buying Property in Saudi Arabia: Looking Into the 2025 Changes

Saudi Arabia is overhauling one of its most restrictive immobiliare regimes.

In July 2025, the Cabinet approved the Law of Real Estate Ownership and Investment by Non-Saudis, published in the official gazette Umm al-Qura. The law introduces a 180‑day transition period, with full implementation set for January 2026.

This reform makes buying property in Saudi Arabia easier for foreigners and represents a fundamental shift from the kingdom’s historically cautious approach to foreign property ownership.

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For decades, foreign buyers whether residents or investors faced heavy restrictions that limited their ability to participate in the Saudi real estate market.

The new framework aligns with Saudi Arabia’s Vision 2030 program, which seeks to attract foreign investment, diversify the economy, and modernize regulatory systems.

This article will examine the contrast between the previous rules and the upcoming legal framework is essential for expats, investors, and businesses preparing to enter the market.

The Old Rules: Barriers to Foreign Property Ownership

For years, property ownership by foreigners in Saudi Arabia was tightly controlled under a patchwork of regulations. The system prioritized domestic ownership and treated foreign participation as an exception rather than a norm.

Key limitations included:

Residency Requirement

• Only foreigners holding a valid Iqama (residency permit) were eligible to purchase property.
• Non-residents and short-term visa holders were excluded from direct ownership.

Geographic Restrictions

• Foreign ownership was limited to certain urban areas, primarily major cities such as Riyadh and Jeddah.
• Mecca and Medina were entirely off-limits to foreign buyers, except through indirect structures such as long-term lease agreements or investment via licensed companies.

Property Type and Usage

• Foreigners could purchase only one residential property, and it had to be for personal use.
• Commercial and agricultural property purchases were prohibited unless approved through special investment licenses.
• Land ownership was restricted, with foreigners often limited to usufruct rights rather than full freehold titles.

Ownership Caps and Size Limits

• Property size was typically capped at around 3,000 square meters for individual buyers.
• Additional properties or larger plots required high-level government approval, which was rarely granted.

Regulatory and Approval Process

• Purchases required approval from multiple authorities, including the Ministry of Investment (MISA) and the Real Estate General Authority (REGA).
• The process was bureaucratic and slow, often discouraging potential buyers.

Financing and Mortgage Restrictions

• Mortgage availability for foreigners was limited. Many transactions had to be paid in full or were subject to strict loan-to-value caps.
• Premium Residency holders, introduced in 2019, were given slightly more flexibility but still faced geographic and property-type limitations.

These constraints collectively created a market in which foreign participation was minimal. Ownership was largely symbolic rather than economically transformative, reinforcing the perception of Saudi Arabia as a closed market for international property investment.

Saudi Arabia New Real Estate Law: Opening the Doors

The Law of Real Estate Ownership and Investment by Non-Saudis, enacted in July 2025 and set to take effect in January 2026, represents the most significant reform of Saudi property law in decades.

It replaces the fragmented rules that previously governed foreign ownership with a unified legal framework designed to expand market access while maintaining regulatory oversight.

Expanded Eligibility

• Foreign individuals: Expatriates with legal residency will be able to purchase property under clearer, standardized rules.
• Non-resident foreigners: May acquire property in designated investment zones through regulated channels, particularly for commercial purposes.
• Corporate ownership: Foreign companies, including joint ventures and wholly foreign-owned entities licensed by the Ministry of Investment, can directly acquire property for business or investment activities.
• Premium Residency holders: Gain the broadest property rights, with the ability to buy residential and commercial properties in most permitted zones with minimal additional approvals.

Geographic Expansion

• The law allows property ownership across the kingdom in zones defined by the Real Estate General Authority (REGA).
• While Mecca and Medina remain prohibited for individual foreign ownership, investment through listed companies or specialized government-approved structures may be permitted in limited cases.
• Secondary cities and emerging economic regions, including areas linked to Vision 2030 “giga-projects” such as NEOM and the Red Sea Project, are expected to open for foreign participation.

Property Types

• Foreigners will be able to acquire residential, commercial, and agricultural property, subject to zoning and regulatory requirements.
• Unlike the previous regime, full freehold ownership is permitted, granting foreign buyers stronger legal standing compared to the usufruct or leasehold structures of the past.
• Land purchases, once largely restricted, will be allowed within designated development areas to encourage long-term investment.

Streamlined Process

• The approval process will be centralized on the Absher e-government platform, eliminating the need for multiple agency submissions.
• Documentation requirements will be standardized, reducing delays that previously discouraged foreign buyers.
• Property registration and title transfers will be digitized, with electronic verification systems introduced to ensure legal security and reduce fraud risk.

Financing and Investment Integration

• The law is expected to align with ongoing financial reforms, allowing greater access to Saudi mortgage markets for eligible foreigners.
• Premium Residency holders and corporate entities will likely benefit from preferential financing terms in collaboration with Saudi banks.
• Foreigners may also participate in Trust di investimento immobiliare (REIT) and other regulated investment vehicles as part of the broader liberalization of the property sector.

Remaining Restrictions

• Foreign individuals will still be limited to one residential property for personal use unless holding Premium Residency or operating through an approved investment entity.
• Strategic and sensitive areas including border zones and military-adjacent lands will remain restricted.
• All ownership remains subject to compliance with zoning laws and land-use regulations issued by REGA.

This new legal structure significantly widens the scope for foreign participation in the Saudi property market, signaling a deliberate effort by the government to align real estate policy with its investment-driven economic diversification strategy.

Implementation and Compliance for Foreign Property Ownership in Saudi Arabia

Executive Regulations and Zoning Maps

The Real Estate General Authority (REGA) is responsible for issuing the executive regulations that will operationalize the new law.

These regulations, expected by late December 2025, will define the specific geographic zones where foreign ownership is permitted and outline conditions for residential, commercial, and agricultural acquisitions.

Zoning maps will be published through REGA’s official channels and the Istitlaa public consultation platform, giving stakeholders such as investors, developers, and legal professionals the opportunity to review and provide feedback.

This step is intended to ensure transparency and minimize legal ambiguity before the law comes into effect in January 2026.

Digital Registration and Transaction Processing

To simplify what was once a slow and bureaucratic process, the government will consolidate property transactions involving foreign buyers into the Absher e-government platform.

This platform will serve as a centralized system for application submission, identity verification, property registration, and title issuance.

By digitizing these processes, the government aims to reduce procedural disputes, improve transaction speed, and create a verifiable record of foreign ownership. The integration with existing government databases will also enhance compliance monitoring and fraud prevention.

Compliance and Enforcement Mechanisms

The new framework includes robust enforcement provisions to ensure that foreign ownership remains within defined legal boundaries. Key penalties for non-compliance include:

• Administrative fines for procedural violations.
• Forced divestment of properties acquired outside permitted zones.
• Temporary or permanent bans on future acquisitions for repeat offenders.

REGA will coordinate with the Ministry of Investment to track transactions and verify that all property acquisitions meet zoning and ownership criteria.

Transitional Provisions for Existing Owners

Foreigners who began property transactions under the previous rules will be allowed to complete them under the old framework. However, all purchases initiated after January 2026 must comply with the new law.

Current foreign owners will retain their existing rights, but any subsequent acquisitions will be governed entirely by the updated system. This provision ensures continuity while establishing a clear legal cutoff for the new regime.

Market Oversight and Ongoing Review

The government will monitor the effects of the law on domestic housing affordability and market stability. REGA is expected to introduce reporting requirements for large-scale investors, helping prevent speculative activity and ensuring that foreign ownership contributes to long-term development goals rather than short-term price inflation.

This combination of clear regulations, digital infrastructure, and active oversight is intended to balance investor access with the kingdom’s broader economic and social priorities.

Saudi Arabia Property Market Outlook for Foreign Buyers

Saudi Arabia’s property law reform is expected to reshape the real estate market, attracting both foreign capital and institutional investors. However, the scale and speed of the impact will depend on zoning regulations, financing availability, and the government’s ability to balance openness with affordability.

Growth in Foreign Demand

The removal of many ownership barriers will open the market to a broader pool of buyers:

• Expats and residents will now be able to purchase property without navigating excessive bureaucratic hurdles, likely driving demand in major cities such as Riyadh and Jeddah.
• International investors and corporations may enter previously inaccessible segments, particularly commercial real estate and development land tied to major Vision 2030 projects.
• Premium Residency holders, who already enjoy preferential rights, are expected to be early adopters of the new framework.

This influx of new buyers is likely to boost transaction volumes and accelerate development in both established and emerging markets.

Impact on Property Prices

While greater foreign participation may create upward price pressure in prime urban locations, the effect is likely to be moderated by new supply in areas designated for development. Government-controlled zoning will play a critical role in ensuring that:

• Speculative activity is contained.
• Affordable housing for citizens remains accessible.
• Foreign capital is directed toward growth corridors rather than solely into high-demand metropolitan districts.

If effectively managed, this reform could drive urban expansion rather than merely inflating prices in existing hubs.

Investment in Emerging Regions

Beyond Riyadh and Jeddah, secondary cities and special economic zones are likely to benefit the most. Projects linked to Vision 2030, such as NEOM, the Red Sea Project, and Qiddiya, may become magnets for foreign participation. These regions offer:

• Lower entry costs compared to major cities.
• Strong government-backed infrastructure commitments.
• Opportunities for early-mover investors to acquire strategically valuable assets before prices peak.

This trend could also help diversify investment across the kingdom, reducing the historical concentration of real estate activity in a few urban centers.

Strategies for Foreigners Buying Property in Saudi Arabia

The six-month transition period leading up to January 2026 offers prospective buyers a critical window to prepare. Foreign investors, expatriates, and companies should take the following steps to position themselves for the new market environment.

Monitor Regulatory Developments

REGA will issue zoning maps and executive regulations that define exactly where and how foreigners can purchase property. Buyers should:

• Track updates on REGA’s website and the Istitlaa consultation platform.
• Review any restrictions on land size, property type, or investment purpose.
• Seek early clarification on rules for agricultural and commercial acquisitions.

Remaining informed will be essential to avoiding costly compliance errors.

Consider Premium Residency

While the new law liberalizes ownership, Premium Residency remains a powerful tool for foreign buyers who want greater flexibility. Premium Residency holders can:

• Own multiple properties in various zones.
• Access financing with fewer restrictions.
• Streamline property registration and related approvals.

For high-net-worth individuals or frequent investors, obtaining Premium Residency before 2026 may offer a strategic advantage.

Engage Licensed Professionals

Legal and procedural compliance will be critical during the early implementation phase. Buyers should:

• Work with licensed real estate agents familiar with Saudi regulations.
• Retain legal counsel to review contracts and ensure transactions meet zoning requirements.
• Verify property titles through REGA’s digital registry to avoid fraudulent sales.

This is especially important for non-residents, who will need reliable local representation to navigate the system effectively.

Evaluate Financing and Tax Implications

Although the law simplifies ownership, buyers must also account for financing and long-term costs.

• Review mortgage options with Saudi banks and international lenders.
• Assess potential capital gains or property-related tax liabilities as new regulations emerge.
• Consider the costs of maintenance, service charges, and insurance, which may vary by property type and location.

Thorough pianificazione finanziaria will help ensure that acquisitions remain sustainable over time.

Time Purchases Strategically

The early months after January 2026 may see a surge of initial demand and price adjustments as the market reacts. Buyers who prepare now will be better positioned to:

• Secure properties in emerging zones before competition intensifies.
• Identify undervalued opportunities outside primary metropolitan areas.
• Avoid rushing into purchases without clarity on long-term market trends.

A disciplined, informed approach will be the difference between speculative risk and strategic investment in Saudi Arabia’s evolving real estate sector.

It is highly recommended to consult an consulente finanziario per gli espatri for more personalized guidance.

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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.