Saudi Arabia Opens Property Market to Foreign Buyers Under Landmark 2026 Law

{getToc} $title={Table of Contents}

New Saudi rules let foreigners, including UAE residents, buy property from 2026, opening fresh regional investment plays.

Saudi Arabia has enacted one of its most significant economic reforms in decades by implementing the Law of Real Estate Ownership by Non-Saudis (Royal Decree No. M/14), which came into full force on 21 January 2026. The legislation replaces the previous 2000 framework and opens freehold property ownership to foreign individuals and entities for the first time, marking a pivotal moment in the Kingdom's Vision 2030 diversification agenda.

For UAE-based investors and expatriates, the reform creates new pathways into a real estate market that contributed approximately 12% of Saudi GDP in 2024. Real estate transactions in Q1 2025 alone reached USD 29 billion across residential, office, and hospitality sectors, according to industry data reported by CBRE.

Who Can Buy and Where

The new framework extends ownership rights to both foreign individuals and legal entities. Foreign residents holding valid Saudi residence permits (iqama) may purchase property within designated zones and may also acquire one residential property for personal use outside these zones, subject to Ministry of Interior approval. Non-residents are restricted to purchases within Council of Ministers-approved designated zones only.

Foreign-registered companies, investment funds, special-purpose vehicles, and non-profit organisations may also acquire real estate for business operations, staff accommodation, and investment purposes. In a historic change, non-Saudi Muslims are now permitted to own property within Makkah and Madinah under specific regulatory conditions, though non-Muslims remain prohibited from ownership in the holy cities.

Designated zones expected to be approved include Riyadh, Jeddah, and the Kingdom's flagship mega-projects: NEOM (USD 500 billion), The Line (USD 200 billion+), Red Sea Global (USD 16 billion+), Qiddiya (USD 8 billion+), and Diriyah Gate (USD 20 billion+). The Real Estate General Authority (REGA) will publish detailed zone boundaries through its Geographic Scope Document.

Costs and Financial Requirements

Foreign buyers face a materially higher cost structure than Saudi nationals. The Real Estate Transaction Tax (RETT) stands at 5% of property value, with an additional 5% non-Saudi transfer fee bringing potential government transfer costs to 10% for foreign purchasers. Registration fees add 2.5-5%, agent commissions run 2-5%, and legal fees typically range from SAR 15,000-50,000 (USD 4,000-13,300).

Total acquisition costs for foreign buyers typically fall between 12-15% of purchase price. For a SAR 2 million apartment (approximately USD 530,000), expected total fees and taxes would range from SAR 240,000-300,000 (USD 64,000-80,000). Saudi Arabia does not impose annual property taxes on residential real estate, though community service charges apply at SAR 20-80 per square metre annually.

Mortgage Access for Foreign Residents

Financing availability for foreign buyers is developing but increasingly accessible. Saudi banks are offering mortgage products to foreign residents at rates ranging from approximately 4.1% to 5.0%, with some institutions offering terms up to 30 years. Key lenders include Saudi Fransi Bank (4.10%), Bank Aljazira (4.96%), and Riyad Bank (4.99%).

Foreign residents typically qualify for loan-to-value ratios of 70-80%, compared to 85-90% for Saudi nationals, requiring substantially larger down payments. Eligibility generally requires a valid iqama, stable employment, monthly income between SAR 3,000-15,000, and debt-to-income ratios not exceeding 40%. Non-resident foreign buyers face significant constraints, as most Saudi banks do not currently offer mortgages to this segment.

Strategic Considerations for UAE Investors

Industry consultants advise UAE-based buyers to view the Saudi market as currently in a "price discovery and regulatory bedding-in phase," contrasting with the UAE's mature, globally familiar investment environment. The Kingdom attracted USD 30 billion in foreign direct investment in 2024, with real estate cited as a cornerstone of its diversification strategy.

Residential market momentum remains strong. Q3 2025 transaction volumes grew 17.9% quarter-on-quarter according to CBRE data, while Riyadh apartment prices rose 6.3% year-on-year and villa prices increased 11.6%. Market observers consistently recommend positioning Saudi real estate as a long-term strategic play tied to Vision 2030 infrastructure spending and population growth rather than short-term speculation.

All acquisitions must be registered through the Saudi Properties digital platform launched by REGA in late December 2025. The full acquisition process typically requires 1-3 months from application to completed registration.