ISLAMABAD: Saudi Arabia has officially enacted a transformative lawpermitting foreign nationals to purchase and own residential homes,commercial land, and agricultural farms in specified zones starting January2026. Approved via Royal Decree in July 2025, the legislation replacesearlier restrictive frameworks and aims to attract international investmentwhile boosting economic diversification. With restrictions in holy citieslike Makkah and Madinah largely preserved for non-Muslims, the move signalsa calibrated opening of the real estate sector, expected to enhanceproperty supply and urban development.
The new framework, titled the Law of Real Estate Ownership by Non-Saudis,designates geographic zones where foreigners can acquire full ownership orusufruct rights. These zones, to be finalized by the Council of Ministerson recommendations from the Real Estate General Authority (REGA), areanticipated to include key areas in Riyadh, Jeddah, and emergingdevelopment hubs. For residential properties, non-resident foreigners facestricter limits, while residents with valid permits may own one personalhome outside zones, subject to approvals.
A key aspect of the reform is the broad access granted for commercial,industrial, and agricultural properties, available nationwide withoutcity-specific exclusions. This provision encourages foreign directinvestment in business operations, employee housing, and farming ventures.Experts note that the policy supports Vision 2030 objectives by increasingliquidity in the real estate market, fostering job creation in constructionand related sectors, and elevating architectural standards through globalparticipation.
Pakistanis form one of the largest expatriate groups in Saudi Arabia, withrecent data indicating significant migration flows. In 2025 alone, overhalf a million Pakistanis moved to the Kingdom for work, adding to anestablished community numbering in the millions historically. Manylong-term residents, including professionals and families, have contributedto various sectors but faced limitations on permanent asset ownership. Thenew law positions this demographic as major potential beneficiaries,allowing them to invest in homes for personal use or future generations.
Implementation details, including precise zoning maps, ownership caps, andtransaction procedures, are being prepared through executive regulationsexpected before full activation. A real estate transfer fee of up to 5percent on non-Saudi transactions will apply, alongside the existing 5percent Real Estate Transaction Tax, ensuring regulatory oversight.Violations carry penalties, including fines or forced sales, to maintainmarket transparency and prevent speculation.
The reform builds on prior limited allowances under the 2000 law, whichrequired special licenses for investors. By expanding eligibility toindividuals and entities, including listed companies and investment funds,the Kingdom seeks to deepen capital markets and integrate foreign expertiseinto mega-projects like NEOM and Qiddiya. Residential sales in major citieshave shown strong growth, with Riyadh recording substantial transactionvolumes in recent quarters, underscoring demand potential.
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For expatriates, the change offers pathways to greater stability beyondtemporary residency. Those holding premium iqama or long-term permits gainenhanced options for personal property, potentially reducing reliance onrentals and supporting family integration. Analysts project increasedinflows of investment, particularly from Gulf neighbors and South Asiancommunities, which could stimulate secondary markets in furnishings,mortgages, and legal services.
While holy cities retain protections to preserve cultural and religiouscharacter, Muslim expatriates may access limited opportunities there underspecific conditions. The policy balances openness with safeguards for Saudicitizens, including mechanisms to curb price inflation and ensure housingaffordability. Overall, the law represents a strategic evolution in SaudiArabia’s economic landscape, inviting global participation whileprioritizing national priorities.
Source: https://www.arabnews.com/node/2607640/saudi-arabia
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