What foreigners need to know about buying property in Saudi Arabia

The National

a day ago

Foreigners will be able to buy real estate in designated areas in Saudi Arabia from January 2026.
Housing Minister Majed Al Hogail told the Saudi Gazette on Wednesday that 'ownership will be permitted within specific geographic areas − particularly in the cities of Riyadh and Jeddah − with special requirements for ownership in Makkah and Madinah'.
In January, the kingdom allowed foreigners to invest in publicly listed local companies that own real estate in Makkah and Madinah.
Saudi Arabia has taken several measures to boost its attractiveness as a global investment destination as part of its Vision 2030 plan to wean the economy off its dependency on oil revenues.
Here's what you need to know about buying property in Saudi Arabia:
Where can foreigners buy property in Saudi Arabia?
Starting January 2026, international buyers will gain access to the Saudi real estate market within designated areas.
While Riyadh and Jeddah are likely to be prioritised for foreign ownership, Makkah and Madinah will have specific conditions or restrictions. Not all areas will be open to foreign ownership.
The Real Estate General Authority, the regulatory body for real estate in Saudi Arabia, will define the permitted zones and their conditions in the forthcoming executive regulations.
'The law includes geographic restrictions to maintain cultural, religious and regulatory sensitivities. These measures aim to balance international investment with national interests and community integrity,' says Amar Hussain, associate partner, research – Middle East, at real estate consultancy Knight Frank.
The law is expected to permit ownership of various asset types, including residential and commercial properties and possibly agricultural land, subject to specific location-based conditions and oversight, Mr Hussain adds.
Most of Saudi Arabia's future projects are in Riyadh and Jeddah as the kingdom prepares for the Fifa World Cup in 2034. In addition, the 2029 Asian Winter Games will be another opportunity to showcase the development work in the kingdom, according to Junaid Ansari, director of investment strategy and research at Kamco Invest.
Who can buy under the new scheme?
The new law is understood to include both foreign residents and non-resident foreigners, effectively opening the kingdom to a global investor base, Matthew Green, head of research at CBRE Mena, says.
In other similar moves within the region − namely the UAE, Qatar and Oman − this has led to the start of a new real estate cycle and subsequent positive value growth in the preceding years, as 'improved ownership title, new regulations, bigger addressable market and wider source markets' help to transform the real estate landscape, he explains.
Why buy in Saudi Arabia?
The local demand is significant and there is an undersupply in the residential sector. Also, prices in Saudi Arabia are still broadly lower than similar property prices in the UAE, according to Mr Ansari.
House prices in the designated international investment zones are likely to perform better, or grow faster than the rest of the market, where the rate of house price growth is likely to slow as domestic households move into longer holding patterns before they are able to transact, according to Faisal Durrani, head of research Mena at Knight Frank.
Can foreigners buy property in the kingdom today?
International buyers and investors are already able to access the property market in the kingdom under the property-ownership linked premium residency visa, which was launched in January 2024, Mr Durrani says.
The conditions attached to this are a minimum spend of 4 million Saudi riyals ($1.1 million) and that the properties must be fully completed and mortgage-free, he informs.
Separately, this January, laws were amended to permit international investors to access property markets in the holy cities of Makkah and Madinah through listed property development companies.
'In the wake of Vision 2030 and the subsequent giga project announcements, demand from international buyers for homes in the kingdom has been building on the sidelines,' Mr Durrani says.
'This demand is strongest among global Muslim high-net-worth individuals who are non-residential in the kingdom. In fact, 86 per cent of global Muslim HNWIs are keen to own a home in the kingdom, with the majority focused on the Makkah and Madinah.'
Mr Green of CBRE says ownership in the kingdom is currently restricted to those participating in the premium residence scheme through licensed foreign developers and other indirect ownership vehicles, including real estate funds or through shares in a publicly listed company.
What can you buy?
The new law is expected to permit a broader scope for foreign ownership, with individual units and buildings across designated areas, Mr Green says.
'Opening the market up to international buyers and investors is something that has been long anticipated,' Mr Durrani says.
This will facilitate greater international investment, while ensuring that Saudi nationals aspiring to own a home are not necessarily competing directly with global buyers
Faisal Durrani,
head of research Mena, Knight Frank
'This is an exceptionally positive move and will facilitate greater international investment in the real estate market, while ensuring that Saudi nationals aspiring to own a home are not necessarily competing directly with global buyers.'
What hurdles are investors likely to face?
The biggest hurdle would be the residency issue, but the kingdom is expected to ease the golden visa programme and other ways to attract talent and people, says Mr Ansari from Kamco Invest.
'Even the UAE opened its market very gradually. We believe the UAE's experience would also play a key role in drafting future residency rules,' he reckons.
The executive regulations defining ownership procedures, eligibility and restrictions are still pending in the kingdom.
'It is highly likely that the Real Estate General Authority regulations will include updated terms and fees related to acquiring the new property title, and that some of the historical taxations may be amended to encourage foreign investors to enter the market,' CBRE's Mr Green says.
'However, preparations have already begun, with REGA now working to finalise the finer details of the law, including clarification on the designated areas, related restrictions, refinement of the registration process, and related fees.'
However, the Saudi real estate market is still maturing, and processes may not be as streamlined as in neighbouring countries, according to Knight Frank.
Will foreign ownership make house prices more unaffordable?
The decision to allow international buyers access to real estate markets in the kingdom in specific investment zones is likely to be confined to the major giga projects, which will have the impact of creating a two-tiered market – one for international buyers and one for domestic buyers, says Harmen de Jong, regional partner – head of consulting at Knight Frank.
As a result, prices within giga projects are likely to accelerate faster than the rest of the more mainstream market, he estimates.
The acceleration of house prices in Saudi Arabia over the past five years has been 'exceptional', with prices for apartments in Riyadh, for instance, up by nearly 82 per cent since 2019. However, salaries have not risen by a commensurate level and affordability challenges have begun to emerge, according to Knight Frank.
Mr Ansari from Kamco Invest also expects property supply to 'increase gradually' as regional and international real estate companies boost their presence in the kingdom, similar to the gradual growth recorded in the UAE and other GCC countries that opened their real estate sector.
Is property tax levied in Saudi Arabia?
Historically, Saudi Arabia has not imposed property taxes in the same way as some other countries, but this may change with the new regulations, according to Mr Hussain from Knight Frank.
Detailed provisions regarding legal protections, rights of inheritance and dispute resolution mechanisms are not yet available. More clarity will come with the release of executive regulations, he adds.
Saudi Arabia levies a 5 per cent real estate transaction tax, which is applied to the ownership transfer of an asset based on the property's sale value. This is normally paid by the seller in advance, CBRE's Mr Green says.
However, there are multiple exceptions, such as for inheritance, when the transfer is to a first degree relative. Similarly for other government and special interest cases, the tax is sometimes exempted.
'There is also 15 per cent VAT, which is sometimes applied to the sale and lease of commercial properties (including office, retail and industrial properties), but residential properties are exempted,' he says.
'Other fees are also applied, including title deed registration, service connection fees, permitting fees, etc.
'Finally, there is a capital gains tax that can be applied on the sale of a business asset (real estate, shares, etc.) if it is traded for a profit over and above the original purchase value. The application of this tax can vary, with a 2.5 per cent zakat or 20 per cent tax on ordinary income. However, the CGT is not currently being applied to an individual buying or selling property.'