Real Estate Foreign Ownership in Saudi Arabia: What Investors Need to Know About the New Property Law

Starting in January 2026, Saudi Arabia will open its real estate market to foreign investors, with a new law allowing non-Saudis to purchase property within designated areas. This historic change is set to transform the Kingdom’s real estate market, particularly in cities like Riyadh and Jeddah, which are seeing significant urban development and infrastructure growth. However, special conditions will apply for property ownership in Makkah and Madinah, where certain properties remain restricted.

The updated law is a key element of Saudi Arabia’s Vision 2030, aiming to diversify the economy, attract foreign direct investment (FDI), and modernize the real estate market. But what does this mean for international investors, and how can you navigate this exciting new landscape?

A Closer Look at the Key Features of the New Law:

The new law, set to take effect in January 2026, introduces several important changes aimed at making property ownership in Saudi Arabia more accessible to foreign investors. Here’s what you need to know:

1. Geographic Restrictions and Opportunities

The law allows non-Saudis to own property in several major cities, including Riyadh and Jeddah, but there are limitations for ownership in the holy cities of Makkah and Madinah. While the law permits some property ownership in these cities, specific properties remain restricted, mainly due to their cultural and religious significance.

1. Riyadh: The Capital of Growth

Riyadh, the capital and largest city of Saudi Arabia, is central to the Kingdom's economic and real estate growth. With a population of over 8 million, Riyadh is seeing rapid development in both commercial and residential real estate. The city’s infrastructure projects, like the Riyadh Metro and King Abdullah Financial District, make it a prime location for foreign investors. With foreign ownership allowed, Riyadh offers a growing market for investors seeking opportunities in office spaces, residential developments, and mixed-use projects.

2. Jeddah: Gateway to the Red Sea

Jeddah, Saudi Arabia's main port city, serves as a key commercial hub with over 4 million residents. The city benefits from its strategic location along the Red Sea, driving both trade and tourism. With foreign ownership now allowed, Jeddah offers opportunities in both commercial and residential real estate. The market is growing rapidly, particularly in tourism-driven properties like hotels and short-term rentals. As the city expands with projects like Jeddah Central, it presents strong potential for investors in both commercial and residential sectors.

3. Makkah: The Heart of Islamic Tourism

Makkah, the holiest city in Islam, draws millions of visitors each year for Hajj and Umrah. While foreign ownership is limited in certain areas, Makkah offers real estate opportunities in designated tourism zones, primarily focused on hotels and accommodation for pilgrims. The demand for tourism-related properties continues to rise, especially near the Masjid al-Haram. Despite restrictions, the pilgrimage tourism sector provides attractive opportunities for foreign investors in specific zones.

4. Madinah: A City of Peace

Madinah, the second-holiest city in Islam, attracts millions of visitors annually. Similar to Makkah, Madinah’s real estate market is centered around pilgrimage tourism, with a strong demand for accommodation and hospitality properties. Foreign ownership is allowed in designated zones, particularly in tourism-related developments such as hotels and commercial spaces. As the city continues to modernize and expand, infrastructure projects like the Prince Mohammad bin Abdulaziz International Airport expansion are expected to further increase demand for commercial and hospitality properties.

2. Regulatory Oversight and Public Consultation

The Real Estate General Authority (REGA) will define the specific geographic areas eligible for non-Saudis to purchase property. The REGA is also tasked with drafting the executive regulations, which outline the detailed procedures for acquiring property rights. These regulations will be published for public consultation within 180 days of the law’s publication

3. Protecting Foreign Investors' Interests

While the law aims to attract international investors, it also ensures that foreign investors benefit from a balanced and stable real estate market. The updated law includes mechanisms that prevent property speculation and excessive price inflation, providing a secure and predictable environment for foreign investments. These protections help ensure that foreign investors can make informed, long-term decisions without the risk of market volatility. Saudi authorities are committed to maintaining a market that is transparent and accessible, fostering confidence for foreign investors in the Kingdom's growing real estate sector.

How This Law Opens New Doors for Foreign Investors

This updated law marks a significant milestone in the Kingdom’s economic diversification. By welcoming international property owners, Saudi Arabia is creating substantial investment opportunities, particularly in the following areas:

1. Access to High-Growth Urban Markets

With a focus on cities like Riyadh and Jeddah, the Kingdom is fostering vibrant real estate markets that offer both residential and commercial investment potential. These cities are undergoing rapid development, supported by government-backed initiatives aimed at transforming their urban landscape into global hubs.

2. Expanding the Tourism Sector

As Saudi Arabia works to become a top global tourist destination by 2030, there’s immense potential for investors to own property in tourism hubs. These include luxury hotels, resorts, and tourism-related commercial real estate. The new law offers the opportunity to participate in the development of the Kingdom’s tourism infrastructure, particularly in Riyadh, Jeddah, and the coastal developments along the Red Sea.

3. Clear and Streamlined Process for Ownership

The law introduces greater legal clarity for foreign investors, with a defined process for property acquisition and rights acquisition. The inclusion of public consultation on the executive regulations ensures transparency, enabling potential investors to stay well informed throughout the process.

Why Enter Saudi Arabia’s Real Estate Market Now?

The Saudi real estate market is set to experience unprecedented growth over the next decade, and this law will open doors to substantial opportunities. Whether you are looking to invest in residential properties in Riyadh and Jeddah, take part in the Kingdom’s urban revitalization projects, or expand your real estate portfolio, now is the perfect time to enter.

• Access to High-Growth Markets: The Kingdom’s urban centers are growing rapidly, presenting attractive investment opportunities.
• Supportive Government Policies: Saudi Arabia’s government is committed to attracting foreign direct investment and creating a stable, transparent market.
• Legal Clarity and Transparency: The new law streamlines the investment process, providing investors with legal certainty and clarity.

FAQ Summary

1. When does the new property ownership law take effect?
The law takes effect in January 2026, allowing foreign investors to purchase property in designated areas within Saudi Arabia.

2. Can non-Saudis own property in Makkah and Madinah?
Foreign ownership is restricted in Makkah and Madinah due to religious significance, but designated tourism zones allow investment in hospitality and tourism-related properties.

3. What is the role of the Real Estate General Authority (REGA)?
REGA defines approved ownership zones for foreigners, drafts regulations, and manages the property ownership process, ensuring transparency.

4. What are the benefits for foreign investors?
The law provides access to Riyadh and Jeddah for residential and commercial real estate, with legal clarity, transparency, and alignment with GCC regulations, fostering a secure investment environment.

5. Are there any restrictions or additional requirements for foreign investors?
Foreign investors must comply with designated zones and Saudization requirements, ensuring a smooth investment process.

6. How can TASC assist investors?
TASC offers legal guidance, helps with property acquisitions, ensures Saudization compliance, and provides workforce solutions to streamline the investment process.

How TASC Can Support Your Investment Journey in Saudi Arabia

Ready to take advantage of Saudi Arabia’s booming real estate market?

TASC Outsourcing is here to guide you through the new property ownership law with over 18 years of experience.

We’ll help you with:

• Legal Guidance & Compliance: Stay compliant with Saudi regulations.
• Saudization Compliance: Ensure your workforce meets local requirements.
• Tailored Workforce Solutions: Get the right talent for your projects.

Contact TASC today to ensure your success in Saudi real estate. Let’s make your investment journey smooth and profitable!