Saudi Arabia has approved a radical housing-market reform – the new foreign property-ownership law will take effect in January 2026. Adopted in July 2025, the legislation grants access to Saudi real estate for individuals, companies, investment funds and even diplomatic missions. The real estate regulator, REGA, must publish a detailed geographic map of permitted zones before the end of the year, and it is already clear that this will be the region’s most significant regulatory shift in the past decade.
Who gets the right to buy and what ownership formats will be available
The law covers a broad range of buyers. Foreign individuals, regardless of residency status; foreign companies of any jurisdiction; investment funds and SPV structures with foreign participation; Saudi companies with foreign shareholders; diplomatic missions and international organisations on a reciprocity basis; and registered foreign non-profit organisations all have the right to own property. Permitted ownership formats include:
- Full freehold ownership of land and buildings
- Usufruct rights with income-generation capability
- Easements and other registrable fundamental rights
All transactions require registration in the national real estate registry. The law is synchronised with the Premium Residency programme – the Saudi “golden visa”, whose entry threshold remains 4 million riyals (approximately USD 1.1 million). The document also accounts for GCC-specific ownership rules.
Geography of purchases – what about Mecca and Medina?
Until January 2026, foreigners have access to only around 10 pilot projects nationwide. After the law comes into force, the geography will expand, but exact boundaries will be defined by REGA’s separate Geographic Scope Document, expected in early January.
What authorities have confirmed so far:
- Riyadh and Jeddah – ownership permitted in designated districts
- Mecca and Medina – access only for Muslims, subject to religious and administrative requirements
- All other regions – will be listed separately with formats and limits
REGA will outline maximum ownership percentages in condominiums and commercial properties, allowable property types, duration of ownership and resale restrictions. Experts expect a cautious approach to avoid price spikes and social tension among locals. The reform has attracted strong interest from investors who simultaneously track Dubai real estate news updates today – the neighbouring emirate remains the benchmark for Saudi regulators. Dubai moved from a closed market to one of the most liquid in the region, and Riyadh is clearly adapting that model to local conditions.
Why Saudi Arabia is opening its market and what this means for the economy
The government links the reform to several strategic goals:
- Attracting foreign investment into construction and urban development, especially for megaprojects like NEOM
- Retaining foreign specialists by offering ownership instead of long-term rent
- Increasing housing supply in cities where demand exceeds availability
- Boosting GDP through construction, property services and tax revenue
- Improving urban quality and infrastructure through development capital
The law fits into a broader liberalisation of the Saudi economy. Over the past three years, the Kingdom has eased visa rules, launched tourist visas, and allowed women to drive and run businesses without a guardian. Opening the real-estate market is a logical continuation – though the pace of reforms raises concerns among conservative groups.
Read also: The UAE is preparing a tax revolution: what will change for investors and residents.
How the new rules compare with neighbouring markets – and what investors must know
Saudi Arabia is following the path already taken by Dubai and Qatar. The UAE opened freehold zones in the early 2000s, turning Dubai into a global investment magnet. Qatar permitted foreign ownership in selected districts of Doha before the FIFA World Cup. Now it is Riyadh and Jeddah’s turn. The difference: the Saudi market is far larger by population and territory, offering greater growth potential. However, local banks are not yet ready to provide accessible mortgages to foreigners – programmes similar to a non residenthome loan Dubai are still undeveloped. Most transactions will likely be cash-based or financed internationally, limiting participation to wealthier investors. Lawyers and financial advisers warn that Saudi Arabia’s legal infrastructure requires careful due diligence. Unlike Dubai – where procedures have been refined over decades – Saudi property-registration systems are still being built for the new reality. Risks involve opaque land registries in some regions, bureaucratic delays and possible regulatory changes during the transition period. The law takes effect in January, but specifics will be published later. REGA must release:
- Exact streets and districts where purchases are permitted
- Maximum ownership shares in multi-unit and commercial buildings
- Allowed property categories (residential, commercial, land)
- Ownership terms and resale rules
- Special restrictions for sensitive zones
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Until then, purchases are possible only in limited, undisclosed pilot projects, so investors are advised to wait for the official zone map to avoid legal complications. The transition period will last at least six months – enough time for registration bodies to adjust procedures to the new volume of applications. Experts recommend entering the market only with legal support and complete verification of documents through local attorneys familiar with land law and REGA practice. Saudi Arabia is systematically opening its market, preparing the legal infrastructure for large-scale foreign capital and aiming to replicate Dubai’s success in attracting global investors. For buyers, this is a chance to enter before prices accelerate – but only with careful verification of zones, ownership formats and registration requirements.
