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Saudi Arabia has dramatically transformed its foreign property ownership laws in 2025, opening unprecedented opportunities for international investors. The new regulations allow foreigners to buy residential and commercial properties in most major cities, with streamlined approval processes and attractive residency benefits.
As of September 2025, the Kingdom has cut property taxes for foreigners from 10% to 5% and introduced a Premium Residency Program tied to property investment, making it significantly more attractive for international buyers to enter the Saudi real estate market.
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Saudi Arabia introduced landmark reforms in July 2025 that will take effect in January 2026, allowing foreigners to own property in most cities except Makkah and Madinah.
The changes include reduced property taxes, streamlined approval processes, and new residency benefits for property investors worth SAR 4 million or more.
| Aspect | Before 2025 | After 2025 Reforms |
|---|---|---|
| Property Tax Rate | 10% for foreigners | 5% for foreigners |
| Approval Timeline | Months to years | 2-4 weeks (digital process) |
| Ownership Areas | Very limited, Iqama holders only | Most cities open (except holy cities) |
| Property Types | Residential only (owner-occupied) | Residential, commercial, land development |
| Investment Benefits | None | Premium Residency for SAR 4M+ investment |
| Rental Rights | Restricted | Full rental rights with proper permits |
| Minimum Investment | No specific threshold | SAR 30M for land development |
What were the main restrictions for foreigners buying property in Saudi Arabia before 2025?
Foreign property ownership in Saudi Arabia was severely restricted before the 2025 reforms, with only Iqama (residency permit) holders allowed to purchase real estate under very specific conditions.
Foreigners could typically own just one residential property, and only for their own residence—investment or rental purposes were prohibited. The approval process required multiple government authorizations and could take months or even years to complete.
The most significant restriction was the complete ban on foreign ownership in Makkah and Madinah, the two holy cities, with no exceptions except for diplomatic missions. Additionally, foreigners were prohibited from buying land for development or commercial purposes unless they were part of massive government-approved projects requiring minimum investments of SAR 30 million or more.
Border areas, military zones, and other strategically sensitive locations were also completely off-limits to foreign buyers. Commercial and industrial real estate was effectively inaccessible except for certain GCC-owned companies operating through regulated investment vehicles.
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What types of real estate could foreigners own in the past, and in which areas of the country?
Before 2025, foreign real estate ownership in Saudi Arabia was limited to residential apartments and villas, and only for Iqama holders purchasing for personal residence.
The geographic restrictions were extensive, with foreigners effectively banned from most new developments and strategic cities. Commercial and industrial real estate was almost entirely off-limits, except for certain GCC-owned companies with special regulatory approval.
Areas completely prohibited included all of Makkah and Madinah provinces, border zones, military areas, and government districts. Even in permitted areas, foreigners faced significant bureaucratic hurdles and lengthy approval processes that often deterred potential buyers.
The ownership rights were also limited—properties had to be used as primary residences, and subletting or rental income generation was heavily restricted. This made real estate investment virtually impossible for foreign nationals.
What new laws or regulations about foreign ownership have been introduced for 2025?
Saudi Arabia approved the landmark "Law of Real Estate Ownership by Non-Saudis" in July 2025, which will take full effect in January 2026, revolutionizing foreign property ownership in the Kingdom.
The new framework opens most Saudi cities to foreign buyers, abolishing the previous blanket ban on non-Saudi ownership outside very limited zones. Foreigners, both individuals and entities, can now own residential and commercial properties and participate in specially designated development zones.
Property tax for foreigners has been dramatically reduced from 10% to 5% in 2025, making purchases significantly more affordable. The government has also introduced a Premium Residency program, often called the "Saudi gold visa," available for property investments of SAR 4 million or more.
The approval process has been digitized and streamlined, with the Ministry of Investment now handling applications through a primarily digital system with standard timelines of 2-4 weeks instead of the previous months or years. Investment in Makkah and Madinah remains restricted for direct ownership, though foreigners may now invest indirectly via shares in Saudi-listed companies owning property in those cities, up to 49% ownership.
Which parts of Saudi Arabia are now open or restricted for foreign buyers after these changes?
| Status | Areas/Cities | Property Types Allowed |
|---|---|---|
| Fully Open | Riyadh, Jeddah, Dammam, King Abdullah Economic City | Residential, commercial, mixed-use |
| Open with Premium Projects | NEOM, Red Sea Project, Amaala, Qiddiya | All types including land development |
| Open with Conditions | Diriyah, Al Ula, most other major cities | Residential and commercial |
| Restricted (Indirect Only) | Makkah, Madinah | Via Saudi-listed company shares (max 49%) |
| Completely Restricted | Border zones, military areas | None |
| Limited Access | Government districts | Case-by-case approval required |
| Special Zones | Various economic cities and free zones | Enhanced investment benefits available |
What kinds of properties can foreigners purchase today that they couldn't before?
The 2025 reforms have dramatically expanded the types of properties foreigners can purchase in Saudi Arabia, moving far beyond the previous residential-only restrictions.
Foreigners can now buy commercial and mixed-use buildings, which were previously completely off-limits. This includes office buildings, retail spaces, warehouses, and mixed-use developments that combine residential and commercial elements.
Raw land for development is now available to foreign buyers, though it requires a minimum investment of SAR 30 million and comes with a 5-year completion requirement. This opens opportunities for large-scale residential or commercial development projects.
Investment properties for rental income are now fully permitted, whereas previously foreigners could only buy properties for personal residence. Foreigners can also purchase multiple properties without the previous one-property limitation.
Indirect ownership in Makkah and Madinah properties is now possible through shares in Saudi-listed companies, allowing foreigners to gain exposure to these previously completely restricted markets up to 49% ownership levels.
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How has the process of getting approval or permits for foreign buyers changed?
The approval process for foreign property buyers in Saudi Arabia has been completely revolutionized, shifting from a lengthy bureaucratic nightmare to a streamlined digital system.
The Ministry of Investment now handles all approvals through a primarily digital platform, reducing the standard timeline from months or years to just 2-4 weeks for most applications. This represents a massive improvement in efficiency and transparency.
Required documentation has been standardized and simplified, including passport verification, property valuation reports, investment licenses for non-GCC buyers, and approval from the Real Estate General Authority (REGA). All submissions can be completed online.
Registration in the national real estate registry has become mandatory but streamlined, providing better legal protection for foreign owners. The process now includes automatic integration with other government systems, reducing duplicate paperwork and processing delays.
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What are the tax implications or financial obligations for foreigners buying real estate now?
The tax burden for foreign property buyers in Saudi Arabia has been significantly reduced, with the transaction tax cut from 10% to 5% in 2025.
Total costs including all fees typically range from 12-15% of the property value, which includes the 5% transaction tax, registration fees, legal fees, and valuation costs. This represents a substantial saving compared to the previous tax structure.
For residential properties that are not rented out, there is no annual property tax. However, income generated from rental properties is subject to taxation under Saudi Arabia's income tax regulations.
Investment projects involving commercial properties or land development face higher minimum investment requirements and may include specific development commitments. For land purchases, the SAR 30 million minimum comes with mandatory completion timelines and potential penalties for non-compliance.
Buyers should also budget for ongoing compliance costs, including mandatory property registration updates and potential legal fees for maintaining proper documentation with Saudi authorities.
Are there specific visa, residency, or investment benefits tied to buying property as a foreigner?
Saudi Arabia's new Premium Residency Program offers significant benefits for foreign property investors, requiring a minimum investment of SAR 4 million in real estate.
The Premium Residency includes long-term renewable residency status, full work rights without needing a Saudi sponsor, family sponsorship capabilities, and unlimited entry and exit privileges. This essentially provides the benefits of permanent residency without the traditional employment requirements.
For higher investment levels or those who create businesses and jobs, permanent residency options become available, offering even greater long-term security and benefits.
Property ownership alone does not automatically grant residency unless through the Premium Residency Program. However, significant real estate investments can support visa applications and demonstrate financial stability for other residency programs.
The program also provides access to Saudi Arabia's growing economic opportunities, including the ability to invest in other sectors and participate in the Kingdom's Vision 2030 development projects.
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How do these new rules affect rental opportunities and potential returns for investors?
Foreign property owners with Iqama or Premium Residency can now legally rent out their properties, opening significant income generation opportunities that were previously restricted.
Rental yields in prime areas are reported at 5-10% annually, with business district apartments and commercial properties commanding the highest returns. Riyadh and Jeddah business districts show particularly strong rental demand from expatriate professionals and corporate tenants.
The primary rental demand comes from the growing expatriate population, followed by local professionals and corporate housing requirements. Major development projects like NEOM and the Red Sea Project are expected to drive additional rental demand as they progress.
Property owners must register rental agreements through the Ejar system to ensure legal compliance and protect their investment rights. This digital platform streamlines the rental process while providing legal protection for both landlords and tenants.
Market experts predict rental opportunities will continue expanding as Saudi Arabia's economy diversifies and attracts more international business and tourism, particularly in the major cities and special economic zones.
What are the risks or limitations that foreigners should still be aware of before buying?
Direct ownership remains completely banned in Makkah and Madinah, the two holiest cities in Islam, which limits investment opportunities in these significant urban centers.
Properties in border areas, military zones, and certain government districts remain permanently off-limits to foreign buyers, and these restrictions are strictly enforced with potential severe penalties for violations.
The market is relatively new for foreign investors, meaning legal and judicial precedents are still developing. While regulations are improving, buyers should expect some ongoing policy evolution and potential regulatory changes as the system matures.
Speculation and property flipping face specific restrictions, and forced sale provisions can be triggered if regulations are breached. Complete documentation and proper registration are strictly enforced, with significant penalties for non-compliance.
Cultural and religious sensitivities remain important considerations, particularly regarding property use, tenant screening, and compliance with local customs. Foreign owners must respect Islamic principles in property management and rental practices.
What practical steps should a foreigner take if they want to purchase property in Saudi Arabia in 2025?
Start by selecting your target location and property type in an approved area, focusing on the major cities like Riyadh, Jeddah, or special development zones that offer the best opportunities for foreign buyers.
Appoint a licensed real estate agent or lawyer with Real Estate General Authority approval—choose professionals with international experience or specific expertise in foreign buyer transactions to navigate the process smoothly.
Obtain pre-approval from the Ministry of Investment and REGA through their digital application system, which typically takes 2-4 weeks. Prepare all required documentation including passport verification, financial statements, and investment licenses for non-GCC buyers.
Complete professional property valuation and comprehensive legal due diligence. For residential purchases, ensure the property is completed and habitable, as incomplete developments may face additional regulatory requirements.
Fulfill all financial obligations including the 5% transfer tax and associated fees. If interested in Premium Residency benefits, submit the additional application during the purchase process for properties worth SAR 4 million or more.
Register ownership in the official national real estate registry to validate your legal rights and ensure proper documentation. If planning to rent the property, comply with Ejar lease registration requirements from the outset.
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How do experts expect the foreign property market in Saudi Arabia to evolve in the coming years?
Market experts predict highly positive growth for major cities and special development zones, expecting the reforms to trigger a significant property boom and substantial increase in foreign investment flows.
Long-term forecasts anticipate major increases in international investment, development of new residential communities specifically designed for expatriates, and expansion of rental stock to meet growing demand from the international business community.
The real estate market is expected to play a crucial role in Saudi Arabia's Vision 2030 economic diversification plans, driving improvements in urban livability and attracting global talent to support the Kingdom's transformation.
However, experts caution that zone definitions, enforcement mechanisms, and legal interpretations will continue evolving as the system matures. Ongoing regulatory and cultural sensitivities remain important factors, particularly around the holy cities and strategically sensitive areas.
The market development is expected to follow a phased approach, with initial growth concentrated in major cities and special economic zones, followed by gradual expansion to secondary cities as infrastructure and regulatory frameworks mature.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Saudi Arabia's 2025 property reforms represent a historic shift that fundamentally changes the investment landscape for foreign buyers.
With reduced taxes, streamlined processes, and new residency benefits, the Kingdom offers unprecedented opportunities while maintaining important cultural and geographic restrictions that investors must carefully navigate.
Sources
- Sands of Wealth - Real Estate Saudi Arabia New Law Foreigners
- Sands of Wealth - Buy House Saudi Arabia
- Gulf News - Saudi Arabia Issues New Law Granting Property Rights to Foreigners
- White & Case - Saudi Arabia Approves Landmark Real Estate Ownership Law
- Aqar FM - 2025 Guide to Property Ownership in Saudi Arabia for Non-Saudis
- King & Spalding - Saudi Arabia Introduces New Legal Framework
- HFW - Saudi Arabia's Landmark Reform on Foreign Real Estate Ownership
- Omnia Capital Group - Saudi Arabia Cuts Property Taxes for Foreign Investors
- Omnia Capital Group - Visa Residency for Property Investors
- Crown Continental - Can Foreigners Buy Property in Saudi Arabia