Saudi Arabia: Foreign ownership legislation goes live

The Geographic Scope and Regulatory Framework were approved by the Council of Ministers on 23 June 2026, and the “Saudi Properties” portal is live and processing all applications. From Cabinet approval in July 2025 through entry into force in January 2026 to full geographic activation, the reform moved from policy to practice in under a year.

The distinction between legal right and practical usability matters more than it sounds. While the law gave non-Saudis the right to own property in January, capital has been circling rather than committing. Funds, developers, and individual buyers understood the destination but not the address. The reform has effectively answered three questions in sequence: whether investors could own, when, and now where. That final piece is what actually drives transactions, and removing this ambiguity is likely to convert pent-up demand into transaction volume faster than a typical regulatory rollout, simply because the interest was already there waiting.

One clarification worth flagging upfront, the zone requirement covered throughout this piece applies specifically to Riyadh, Jeddah, Makkah, Madinah, and AlUla. Outside these five cities, foreign buyers can purchase real estate without being confined to designated zones.

The route to ownership varies by applicant type, but all transactions flow through the Saudi Properties portal and must be completed via SAMA-regulated electronic payments, with title documented in the Real Estate Registry.

The system has three entry points, each processing at a different speed:

• Non-Saudi residents apply directly through the Saudi Properties portal using their residency ID. Residents aren’t fully confined to the zone map and can still purchase a residential property for personal use outside of these designated zones.
• Non-resident individuals must first obtain a digital identity card from a Saudi mission abroad before applying and can only purchase properties within the specified zones.
• Foreign companies without a Saudi presence can register via Invest Saudi’s platform to obtain a national unified number, then submit their application through the portal.

What comes next is less about whether foreign investment will materialize and more about where it will be concentered, both geographically within the designated zones and structurally across asset classes. The speed of execution matters because it compresses the typical lag between regulatory change and market response. Institutional capital waiting since January now has clarity and non-resident buyers who secured digital IDs ahead of the geographic rollout can move immediately.

For investors, the practical question shifts from “can I buy?” to “what should I buy, and where?” For the Saudi market, it’s about how quickly transaction volume translates into price discovery, and whether supply in the designated zones can absorb six months of pent-up demand.

The common thread across all cities is that the zones are clustered around named masterplans, financial districts, economic cities, and large-scale development projects rather than organic, established neighborhoods. Foreign ownership isn’t being directed toward existing residential corridors where expats have historically concentrated. Instead, the framework channels capital toward purpose-built, developer-led supply in areas still under construction or being planned.

This matters because it changes the risk profile and timeline for foreign buyers. Investors aren’t acquiring finished units in mature neighborhoods with established price history and rental yields. They’re entering projects where delivery timelines, absorption rates, and eventual market positioning are still taking shape. The trade-off is access to large-scale developments with master-planning, infrastructure commitments, and institutional backing, but without the price discovery that comes from a functioning resale market, which is, for early-stage investors, precisely where the opportunity sits. Furthermore, it also helps avoid a sharp inflow of demand to established areas that could have pressured affordability for existing residents.

For developers, this structure is intentional. It concentrates foreign capital in zones where supply is controlled, phased, and aligned with broader economic diversification goals. For investors, it means liquidity and exit strategy depend heavily on project execution and whether these new districts achieve the resident and tenant absorption their business cases assume.

Zoning doesn’t just determine who can buy. It changes what land is worth before a single unit is built. A parcel inside an approved zone now has access to a larger buyer pool than an identical parcel just outside it, and that kind of optionality typically gets priced into land ahead of finished asset values because landowners can now underwrite a wider buyer pool when pricing assets.

That said, the immediate, Kingdom-wide impact on land values is likely to be limited rather than broad-based. The more realistic expectation is fragmentation, communities that already exhibit strong underlying demand, the named zones discussed throughout this piece, are the ones most likely to see the most pronounced appreciation over the long-term, while other areas continue to follow their own existing demand and pricing trends, shaped by local fundamentals rather than by this reform specifically. As we’ve seen in other markets that have opened to foreign ownership, the dividing line between freehold-eligible and non-eligible areas tends to blur as the market matures, rather than persisting indefinitely as a hard boundary.

Given the stature of Makkah and Madinah as Islam’s two holiest cities, traditional supply and demand dynamics don’t necessarily apply here the way they do in traditional economic centres. Land within close proximity to the Haram has historically traded at extreme premiums compared to the wide city average. GASTAT recorded over 20 million Umrah performers in the first half of 2025 alone, part of a sustained climb toward the Kingdom’s long-term target of 30 million Umrah pilgrims annually. As that number grows and the Holy Mosques continue expanding, the potential return on any built asset near the Haram rises accordingly, and this is reflected in land values. The most sought-after districts near the religious core (Jabal Omar, for instance) command prices far above the citywide baseline. Religious tourism, not residential fundamentals, has driven that pricing for years and will continue to do so.

It’s worth separating this dynamic from the broader residential market entirely. The zones closest to the core function less like conventional housing and more like hospitality and investment assets, similar to how prime hotel real estate is valued elsewhere. That distinction matters because the price tension described above is concentrated in a specific, investment-grade segment, not the housing stock that serves Makkah and Madinah’s own residents.

Ownership near the Two Holy Mosques carries significance beyond financial return for many Muslim buyers, making this demand potentially less price-sensitive than typical investment capital. If that holds, these hospitality zones could see disproportionate price pressures, concentrated in already scarce, built-out districts with little room for new supply.

That’s also why the affordability question carries more weight here than anywhere else in this reform. Makkah’s residential market has already been under pressure from religious tourism squeezing local housing supply. The restriction to Muslim buyers and the hospitality focus of named zones provide some insulation, but this remains where REGA’s affordability tools would matter most, should investment-driven pricing produce upward pressure on the local residential market.

These three cities start from a more conventional baseline, with functioning residential markets that follow familiar urban economics: location, supply, and income.

Riyadh shows significant price dispersion. Prime districts, particularly those in the center and north of the city, command substantially higher prices than other districts. Notably, Riyadh’s giga-project zones sit largely outside the existing prime corridor, so the zone-eligibility premium will be tested in newer locations rather than reinforcing already expensive neighborhoods.

Jeddah’s pricing runs lower than Riyadh, with developers leaning toward mid-market product in response to local affordability pressure. The 55 development zones represent new, formal, foreign-eligible supply arriving in a city where the market has already been responding to affordability concerns rather than luxury demand.

AlUla is the distinct case. There wasn’t a functioning private resale market until December 2025, when the Royal Commission lifted a suspension on private land sales just a month before the foreign ownership law took effect. Price discovery and foreign eligibility are starting simultaneously. Most of the built environment that exists today sits with PIF’s AlUla Development Company and ultra-luxury hospitality operators, so the demand these 17 zones attract will likely center on heritage tourism and hospitality investment rather than towards conventional residential assets.

The zone model is designed to balance foreign capital inflows with domestic housing affordability. The REGA has several intervention tools it could plausibly draw on if needed: expanding zone boundaries to increase supply, adjusting transaction fees to moderate demand, or allocating a portion of new supply within these zones to local buyers first if prices rise meaningfully in or adjacent to approved zones. None of these represent confirmed policy, they reflect the kind of calibration options a maturing regulatory framework typically makes available as transactions come in. Visible price acceleration in or adjacent to approved zones is the kind of signal that would likely prompt some form of regulatory response, whichever lever the REGA chooses. Investors should model this as an active variable rather than a static framework.

• Developers: Whether this applies at all comes down to one fact, is the project inside an approved zone. For those that are, foreign-ownership eligibility is a marketable feature today, not a future promise, and appropriate repositioning of phases to highlight it should happen immediately. For projects still under construction within a zone, the priority shifts to securing off-plan foreign buyers ahead of completion.
• International investors: The combined fee stack, the standard 5% Real Estate Transaction Tax plus a 2% non-Saudi disposal fee, can reach approximately 7% in total. That structure rewards patient capital over short-hold strategies. Another element worth noting is that Saudi Arabia has no capital gains tax on individual property appreciation, the disposal fee described above applies to transaction value regardless of profit, not to the gain itself. For corporate owners, any gain is captured through standard corporate income tax or Zakat rather than a dedicated capital gains regime. Existing institutional funds can leverage first mover advantages. Those still structuring and raising should prioritize the Invest Saudi registration and obtaining a unified number over zone selection. The administrative pathway matters more than geography at this stage. One compliance point for fund structures and corporate holders: the implementing regulations require foreign companies to disclose direct and indirect owners at registration, and to notify the Ministry of Investment within 15 days if ownership changes by 5% or more. Structures that anticipate post-acquisition ownership changes should factor this in early.
• Saudi investors and developers: Foreign capital will likely firm up pricing and absorption fastest in designated zones. This creates a clearer signal for timing portfolio moves and new launches. Track whether that momentum extends to adjacent districts as the market matures. Secondary effects may create opportunities outside the designated zones.
• Corporate occupiers: Ownership is now a genuine alternative to leasing for companies with long-term Saudi operations. Any near-term lease renewal or relocation decision is worth revisiting against potential owner-occupier options before committing, particularly in zones designed for commercial activity. One distinction worth keeping in mind is REGA’s zone list also includes a separate category for the Kingdom’s giga-projects and Special Economic Zones, NEOM, AMAALA, the Red Sea project, Jazan, Ras Al-Khair, and King Abdullah Economic City, alongside the five cities discussed above. These carry different fee treatment under the implementing regulations and, for the SEZs specifically, additional business-incentive benefits under ECZA. If your real estate need is tied to a licensed operation within one of these zones, that’s worth tracking as its own category rather than assuming it follows the same path as the city zones above.

Short-term: Expect institutional and resident-buyer activity to build first within the named zones themselves, for anything beyond a resident’s single personal-use property, which remains exempt from the zone map. Activity should be concentrated in the designated zones rather than in the cities’ existing expat-heavy districts, where investment-led foreign ownership remains restricted. With the digital ID process already moving efficiently for non-resident applicants, that segment is positioned to scale alongside institutional and resident buyers rather than lag behind. Watch for an early pricing gap between zone-eligible and non-eligible assets in the same district as the clearest read on real demand.

Long-term: The zone model is best understood as a calibration tool, not a permanent ceiling. Opening the market to foreign buyers adds a new layer of demand that can move prices, which is exactly the dynamic the REGA will monitor to protect domestic affordability while attracting foreign capital. Designating specific districts in cities where demand is high, rather than the whole city, lets the supervisory committee watch how price and absorption behave zone by zone before deciding how the framework evolves. The more durable shift, regardless of how calibration plays out, is structural: Saudi Arabia now has a permanent, codified channel for foreign capital, replacing the case-by-case exceptions that defined the previous two decades.