Saudi Arabia Opens the Door to Foreign Buyers: New Property Ownership Law Explained - Arabian Residence

Saudi Arabia Opens the Door to Foreign Buyers: New Property Ownership Law Explained

Published: August 2025

In a landmark move, Saudi Arabia has approved a new law that will allow foreign individuals and companies — including non-residents — to purchase real estate in designated areas across the Kingdom. The legislation, which was ratified in July 2025, represents a major step in the country’s long-term economic diversification strategy and is expected to open up Saudi Arabia’s property market to international investors for the first time on a meaningful scale.

For UK residents interested in international property investment, this development could signal a unique opportunity to access one of the Middle East’s most dynamic real estate markets.

A New Legal Framework for Foreign Ownership

The new law, officially titled the Law of Real Estate Ownership by Non-Saudis, was approved by the Council of Ministers in July 2025 and published in the Official Gazette on 25 July 2025. Under Saudi legislative procedures, the law takes effect 180 days after publication, which sets its effective date for late January 2026.

This law repeals the previous foreign ownership statute, which was enacted in 2000 and only allowed limited property ownership for foreign companies or residents in specific circumstances. The 2025 law goes much further: it establishes a comprehensive framework for foreign individuals, companies, and even non-residents to own, develop and invest in property, subject to regulations that will be issued by the relevant authorities.

The Ministry of Municipal and Rural Affairs and Housing (MoMRAH) and other agencies are now finalising the Implementing Regulations, which will clarify the exact procedures, eligibility criteria, and zones where ownership will be permitted.

Timeline: Key Dates to Watch

  • July 2025: Law approved by Saudi Cabinet.

  • 25 July 2025: Law published in the Official Gazette.

  • January 2026: Law comes into effect (180 days after publication).

  • Late 2025: Implementing Regulations expected to be published, including designated zones and procedural guidelines.

  • 2026 onwards: Phased rollout of foreign ownership zones, registration systems, and transaction procedures.

This timeline means that the next three to four months are critical. Potential foreign buyers — including UK residents — can use this period to prepare documentation, research locations, and engage with legal and financial advisers.

Designated Zones: Where Will Foreigners Be Allowed to Buy?

The law introduces the concept of “designated zones”, areas within Saudi Arabia where foreign ownership will be allowed. The exact list of zones has not yet been published, but officials have indicated that they will include major cities and strategic development areas, such as:

  • Riyadh – the rapidly growing capital city and a central hub for business.

  • Jeddah – the commercial gateway on the Red Sea.

  • Red Sea Project and AMAALA – coastal luxury developments designed to attract international buyers.

  • NEOM – the futuristic mega-city in the northwest of the country.

  • Diriyah – a heritage and luxury development on the outskirts of Riyadh.

The Implementing Regulations, expected later this year, will specify not only the zones but also ownership limits, transaction procedures, and whether properties will be available on a freehold or long leasehold basis.

What About Makkah and Madinah?

For many international Muslims — particularly in the UK — the question of property ownership in Makkah and Madinah is especially significant.

Under the current regime, foreigners cannot directly own property in the two holy cities. However, earlier in January 2025, the Capital Market Authority (CMA) announced that foreign investors could purchase shares or convertible instruments in listed Saudi companies that own real estate in Makkah and Madinah. This created an indirect ownership route through the capital markets.

The new property ownership law does not automatically open freehold ownership in Makkah and Madinah to non-Saudis. Instead, it leaves this decision to the Implementing Regulations. It is widely expected that ownership rules for these cities will be more restricted and carefully managed, potentially allowing specific types of leasehold or investment structures for non-residents.

Why Saudi Arabia is Opening Up Now

The decision to liberalise foreign property ownership is part of Saudi Vision 2030, Crown Prince Mohammed bin Salman’s comprehensive plan to diversify the economy, attract foreign investment, and modernise infrastructure.

Over the past five years, Saudi Arabia has launched massive urban and tourism projects, including NEOM, the Red Sea Project, and the transformation of Riyadh into a global business hub. To support these ambitions, the government is seeking to attract foreign capital and expertise into the property sector — both through direct investment and ownership by individuals.

Opening the market to non-resident buyers also positions Saudi Arabia to compete with regional hubs such as Dubai and Doha, both of which have long allowed foreign freehold ownership in designated zones.

Opportunities and Risks for UK Buyers

For UK residents, this new law could present a first-mover opportunity in a market that has historically been closed to international buyers. Early access to off-plan or launch-phase developments could offer attractive pricing and long-term growth potential, particularly in high-demand cities like Riyadh and Jeddah.

However, there are still significant unknowns:

  • Designated zones are not yet confirmed.

  • The Implementing Regulations will define key details such as transaction procedures, ownership structures, and foreign eligibility.

  • Currency and financing arrangements will need to be carefully considered, particularly for buyers relying on mortgage finance from abroad.

Legal and regulatory clarity will be essential before committing to any purchases. UK investors are advised to monitor official announcements closely and work with legal professionals experienced in both UK and Saudi property law.

Preparing as a UK Buyer

If you’re based in the UK and are considering purchasing property in Saudi Arabia once the law takes effect, there are several practical steps you can take now:

  1. Research destinations and developers – Familiarise yourself with areas like Riyadh, Jeddah, and the Red Sea coast.

  2. Get your documentation in order – This may include proof of funds, ID, tax documents, and potentially enhanced due diligence for cross-border transfers.

  3. Consider currency strategies – The Saudi Riyal is pegged to the US dollar, so GBP–USD rate movements will affect your purchasing power.

  4. Consult legal and financial advisers – Especially those familiar with international property transactions.

  5. Join project waitlists – Some developers may begin pre-marketing to foreign buyers ahead of January 2026.

A New Chapter for Saudi Real Estate

The introduction of the 2025 foreign ownership law is the most significant change to Saudi Arabia’s property market in decades. If implemented smoothly, it will unlock a wave of investment, development, and international participation in one of the world’s most ambitious real estate landscapes.

For UK buyers, this is an opportunity to get in at the very beginning of a new market cycle — but it will require careful planning, due diligence, and timely action as the regulatory picture becomes clearer.

Stay Informed

We’re closely monitoring all updates from the Saudi authorities regarding the new ownership law, Implementing Regulations, and designated zones.

👉 Join our UK Buyer Update List to receive verified announcements, developer launch news, and legal briefings as soon as they are released.


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