Saudi Arabia has published laws outlining the non-Saudi property ownership, marking a landmark move to boost the kingdom’s real estate sector growth.
The law will be enacted 180 days from the publication, following Cabinet approval earlier this month. According to the new law, non-Saudis, including individuals, companies, and non-profit organizations, have the right to property ownership or acquire other legal rights over real estate within specific geographic zones that will be decided by the Cabinet.
The major provision in the law mandates the Council of Ministers, upon a proposal by the Real Estate General Authority and with the approval of the Council of Economic and Development Affairs, to establish the maximum limit of allowable zones for foreign ownership and set upper limits on ownership percentages and durations for usufruct rights.
Foreign individuals legally residing in Saudi Arabia may own one residential property outside restricted areas for personal housing purposes. This does not apply to Makkah and Madinah.
The regulation also includes provisions for corporate ownership. Non-listed companies with foreign shareholders, as well as investment funds and licensed special-purpose entities, will be permitted to acquire real estate throughout the Kingdom, including in Makkah and Madinah, provided the ownership supports operational needs or employee housing. Listed companies and investment vehicles may also acquire property in line with Saudi financial market regulations.
According to Saudi Gazette, diplomatic missions and international organizations can also own areas for official use and residence of their representatives, subject to Foreign Ministry approval and reciprocity conditions.
The new law also aims to ensure compliance by non-Saudi entities must register with the national real estate registry before acquiring property. The law establishes a framework of penalties for violations and imposes a real estate transfer charge of up to 5 percent on transactions involving non-Saudis.
Sanctions include fines of up to $2.6 million (SR 10 million) and, in extreme situations as when information is fabricated, the forced sale of the property with the proceeds given to the state after deductions.
