Introduction
Saudi Arabia has carried out the most significant liberalisation of its property market in its modern history. The Law of Real Estate Ownership and Investment by Non-Saudis, promulgated by Royal Decree No. M/14 (issued in July 2025), took effect on 21 January 2026. It replaces the earlier framework that operated under Royal Decree No. M/15 of 2000, under which non-Saudis could generally only acquire property through individual permits tied to investment licences or residency. The new law moves the Kingdom from a permit-by-permit model to a zone-based system, allowing non-Saudis, both individuals and legal entities, to hold title and other property rights within designated geographic areas as a matter of statutory right rather than discretionary approval.
This article explains what the law actually permits, where it permits it, and the conditions that attach. It covers the designated-zone model and the role of the Real Estate General Authority (REGA), the categories of asset a non-Saudi may acquire, the special treatment of Makkah and Madinah, the link to Saudi Premium Residency, the costs and compliance points to plan for, and the structuring considerations for international investors and businesses. Where the detail sits in implementing regulations that continue to be issued and refined, this article flags the position in general terms rather than guessing at specifics, because the consequences of acting on an out-of-date figure can be material.
The Shift From Permits to Zones
For two decades, non-Saudi real estate ownership ran through Royal Decree No. M/15 of 2000. That regime allowed licensed foreign investors, residents holding the appropriate permits, and diplomatic entities to acquire property, but it did so on a case-by-case basis. The result was a patchwork of permissions that was difficult to navigate and that limited the market's appeal to international capital.
The 2026 law reframes the question entirely. Instead of asking whether a particular foreign buyer qualifies for a permit, the new framework asks whether a particular property sits within a geographic zone that has been opened to non-Saudi ownership. If it does, a non-Saudi individual or entity may acquire rights there subject to the regulatory conditions, without needing a bespoke approval for the transaction.
- From discretionary to statutory. Ownership inside an approved zone is a right under the law rather than a privilege granted application by application.
- From person-focused to asset-focused. The central test shifts toward the location and nature of the property, not only the identity of the buyer.
- From narrow to broad eligibility. Both individuals and legal entities, and in many cases non-residents, fall within the scope of the new regime.
The zone, not the buyer, is the starting question
Under the old regime the first question was whether you, as a foreign buyer, held the right permit. Under the 2026 law the first question is whether the property sits inside an approved geographic zone. Confirm the zone status of a specific property before you assume the new rights apply, because a property outside a designated area does not automatically benefit from the reform.
What Royal Decree No. M/14 Changes
The headline is straightforward: non-Saudis can now hold title and other real estate rights in Saudi Arabia within designated zones. The detail is where the value, and the care, lies.
Who Can Own
The law extends to non-Saudi natural persons and to non-Saudi legal entities, and in many cases reaches non-residents rather than only those living in the Kingdom. This breadth is a deliberate departure from the older model, which leaned heavily on residency and investment licensing. It opens the door to individual buyers, corporate investors, and investment funds alike, and it makes it realistic to hold Saudi property through a structured vehicle rather than only in personal name.
What "Ownership" Covers
The reform is not limited to outright freehold title. It contemplates a spectrum of real estate rights, including ownership and other property interests such as usufruct and long-term rights, depending on the zone and the asset. For investors used to thinking only in terms of buying a freehold, the practical point is that the law supports a range of interests that can be matched to the commercial objective, whether that is occupation, income, or capital exposure.
What Replaced the Old Law
The 2026 law repeals and replaces the 2000 framework. Transactions and rights established under the old regime do not simply vanish, but the governing rules for new acquisitions are the new ones. Anyone holding or considering Saudi real estate should treat the M/14 framework and its implementing regulations as the operative reference point.
The Designated-Zone Model and REGA's Role
The centre of gravity in the new system is the designated zone. Non-Saudis may acquire property rights inside geographic areas that the authorities have opened to foreign ownership, and not freely across the entire country.
How Zones Are Set
The designation process involves the relevant ministries and the Council of Ministers, working in coordination with the Real Estate General Authority (REGA), which is the sector regulator. The authorities identify and publish the geographic scope, defining where non-Saudi ownership is authorised and on what terms. Major urban and economic centres, including Riyadh and Jeddah, together with high-growth and development regions, are widely expected to feature, but the operative detail is whatever the official geographic scope documents say.
Major Development Areas
Saudi Arabia's Vision 2030 giga-projects and development zones are a natural focus for foreign capital, and the designated-zone framework is expected to encompass major project areas. Where a zone is tied to a flagship development, the commercial terms, master planning, and infrastructure context can differ significantly from a conventional city neighbourhood, so the zone designation is only the starting point for diligence.
Headline cities are not blanket permissions
The inclusion of cities such as Riyadh or Jeddah in the conversation does not mean that every property in those cities is open to non-Saudi ownership. Designation operates at the level of defined zones and areas, not entire cities. A property in a major city may sit inside or outside an approved zone, and only the official geographic scope determines which.
What Assets Non-Saudis Can Acquire
The framework contemplates a broad range of assets, though each category carries its own conditions. The table below sets out the main categories at a general level; the precise permissions, caps, and conditions depend on the zone and the implementing regulations.
| Asset category | General position under the framework |
|---|---|
| Residential property | Permitted within designated zones, subject to conditions; central to the Premium Residency real estate route. |
| Commercial property | Permitted within designated zones, supporting business occupation and investment. |
| Agricultural land | Contemplated subject to specific conditions and approvals, given its distinct sensitivities. |
| Shares in major development projects | Investment exposure to flagship projects, subject to the relevant project and regulatory terms. |
| Tokenised / fractional ownership | Recognised as a route to fractional exposure, in some cases remotely, via approved digital structures. |
Tokenised and Fractional Ownership
One of the more forward-looking features of the reform is its recognition of tokenised and fractional ownership. Saudi Arabia has been building digital property registry infrastructure that supports title registration and fractional interests, and the framework contemplates investors taking fractional, tokenised stakes in real estate, in some cases without being physically present in the Kingdom. For international investors, this lowers the entry threshold and changes the diligence picture: the asset is a regulated digital interest in property rather than a deed in a drawer, and the platform, custody, and registry mechanics matter as much as the underlying bricks and mortar.
Agricultural and Special-Use Land
Agricultural land sits in a more sensitive category and is contemplated subject to specific conditions. Investors targeting agricultural or special-use land should expect a higher bar and additional approvals, and should not assume the general residential and commercial permissions extend automatically to land with restricted uses.
Makkah, Madinah, and Restricted Areas
The two holy cities of Makkah and Madinah are treated separately from the general designated-zone framework. Ownership in these areas is subject to special restrictions and conditions that reflect their religious significance, and the general zone rules should not be assumed to apply.
The practical guidance is unambiguous: anyone contemplating a real estate interest in or around Makkah or Madinah needs specific, current legal advice on exactly what is permitted, in what form, and under what conditions at the time of the transaction. This is an area where the gap between a general media summary and the operative legal position can be wide, and where acting on an assumption is genuinely risky.
Treat the holy cities as a separate question entirely
Do not extrapolate from the general zone rules to Makkah and Madinah. These areas carry their own restrictions and conditions. If a transaction touches them in any way, obtain dedicated legal advice on the specific position before proceeding, rather than relying on the broader framework.
Property and Saudi Premium Residency
For many international buyers, residency is as important as the asset itself, and the two connect through Saudi Arabia's Premium Residency programme rather than through automatic grant on purchase.
A real estate route within Premium Residency has been associated with ownership of residential property valued above SAR 4 million. Reported conditions include that the property is residential, fully developed rather than undeveloped land, free of mortgage, and independently valued by an accredited valuer. Meeting the property threshold and qualifying for Premium Residency are distinct steps, and the residency programme has its own application process administered through the relevant Premium Residency authority.
- Confirm the property qualifies. It should sit within an approved zone and meet the residency route's conditions, including value, development status, and valuation requirements.
- Confirm the value threshold currently in force. The SAR 4 million figure has been associated with the real estate route, but thresholds and conditions can change, so verify the current position.
- Apply through the Premium Residency process. Ownership supports the application; it does not replace it.
- Plan for the holding structure early. Whether title is held personally or through an entity can affect both the residency route and longer-term succession and tax planning.
Separate the asset decision from the residency decision
Buying a qualifying property and obtaining Premium Residency are related but separate. Decide what you want the asset to do (occupation, income, capital exposure) and what you want residency to do (status, mobility, family) as two questions. Aligning them deliberately avoids overpaying for an asset that does not actually deliver the residency outcome you assumed.
Costs, Conditions, and Compliance
Acquiring Saudi real estate as a non-Saudi involves more than the headline purchase price. Budgeting and diligence should account for the following at a general level, with current figures confirmed before committing.
Fees and Transaction Costs
- Disposal or transfer fees. A disposal fee reported at up to 5 percent of the property value has been associated with the regime, alongside standard transaction and registration costs.
- Valuation costs. Where an accredited valuation is required, particularly for the Premium Residency route, factor in the cost of an independent appraisal.
- Ongoing costs. Service charges, maintenance, and any applicable holding costs should be modelled over the intended holding period.
Conditions on Ownership
- Zone compliance. The property must sit within an approved geographic zone, and the rights acquired must fall within what that zone permits.
- Asset-type conditions. Residential, commercial, agricultural, and project-linked assets each carry their own conditions, caps, or approvals.
- Regulatory compliance. Ownership is conditional on meeting the regulatory requirements set by REGA and the implementing regulations, including registration through the official systems.
Note: Detailed executive regulations were set to follow within roughly 180 days of the law taking effect on 21 January 2026, and figures such as fees and thresholds can be refined through that process. Always verify the current numbers and conditions against the official sources at the time of the transaction rather than relying on early summaries.
Holding Structures and International Considerations
Because the law reaches non-Saudi legal entities as well as individuals, the question of how to hold a Saudi property is a live one for serious investors. Holding in personal name is simple, but a corporate or fund structure can offer advantages in governance, succession, confidentiality, and tax planning, depending on the investor's wider position.
For Individual Investors
For an individual buying a single residential property, personal ownership may be perfectly adequate, particularly where the objective is occupation or a Premium Residency application. Even then, succession planning deserves thought: how the asset passes on, and under which law, is easier to address before purchase than after.
For Corporate and Fund Investors
For investors acquiring commercial property, multiple assets, or project-linked interests, a holding structure becomes more compelling. The right vehicle can consolidate governance, ring-fence liability, accommodate multiple stakeholders, and align with a broader international group. Establishing or aligning that vehicle is precisely the kind of work that benefits from being designed at the outset rather than retrofitted, and it intersects with the investor's home-country and any intermediate-jurisdiction tax position.
Planning to hold Saudi real estate through the right structure?
AURNE advises international investors and businesses on how to hold Saudi property efficiently, from selecting the right vehicle to aligning it with company formation in the Kingdom and abroad. We turn a property decision into a coherent, well-governed structure.
Connecting the Asset to a Wider Footprint
Many investors acquiring Saudi property already operate, or plan to operate, in the Kingdom and the wider region. Aligning a real estate holding with an operating presence can be efficient, and AURNE supports clients across company formation in Saudi Arabia and worldwide company formation. Where an investor wants an intermediate holding layer, jurisdictions such as the Cayman Islands, the British Virgin Islands, and Mauritius are commonly used, and the right choice depends on the investor's objectives, tax residence, and reporting obligations. The broader point is that a Saudi property is rarely a standalone decision; it usually sits within a wider corporate and personal footprint that benefits from being planned as a whole. AURNE's full range of advisory and structuring services is built around exactly that joined-up view.
What the Reform Means in Practice
The 2026 law is best read as a significant opening rather than an unconditional one. For different audiences, the practical implications differ.
For International Real Estate Investors
- A more accessible market. Zone-based statutory rights are far easier to underwrite than discretionary permits, which improves the investment case.
- Location-led diligence. The first diligence question is whether the property sits within an approved zone, and exactly what that zone permits.
- New routes in. Tokenised and fractional ownership create lower-threshold and potentially remote entry points that change how exposure can be taken.
For Businesses Operating in the Kingdom
- Owning premises. Commercial property ownership within designated zones supports a more permanent operating footprint instead of relying solely on leases.
- Aligning property with the corporate vehicle. How premises are held can be coordinated with the operating company and the wider group for governance and efficiency.
- Vision 2030 alignment. Investing within designated and development zones aligns a business with the Kingdom's strategic priorities, which can matter commercially and reputationally.
Practical Guidance for Prospective Buyers
The most reliable approach is methodical: confirm the framework applies to the specific asset, then build the structure and budget around verified facts.
A Sensible Sequence
- Confirm the zone. Verify that the specific property sits within an approved geographic zone and that the intended use and right are permitted there.
- Confirm the asset conditions. Check the conditions attaching to the asset type, including any caps, approvals, or restrictions.
- Confirm current costs. Verify fees, including any disposal or transfer fee, valuation costs, and ongoing charges, against current official figures.
- Decide the holding structure. Choose personal or entity ownership deliberately, with succession and tax in mind.
- Address residency, if relevant. If Premium Residency is an objective, confirm the current threshold and conditions and plan the application as a separate step.
- Register correctly. Complete acquisition and registration through the official systems and keep complete records.
Common Pitfalls
- Assuming a whole city is open. Designation operates at the zone level, not the city level; confirm the specific area.
- Treating the holy cities as ordinary zones. Makkah and Madinah carry special restrictions and need dedicated advice.
- Relying on early figures. Fees and thresholds can be refined through implementing regulations; verify before budgeting.
- Buying for residency without checking the route. Owning property does not automatically grant residency; the Premium Residency route has its own threshold and conditions.
- Leaving structure to the end. Retrofitting a holding vehicle after purchase is harder and costlier than designing it first.
Key Takeaway
Saudi Arabia's 2026 law makes non-Saudi ownership a statutory right inside designated zones, but the value lies in the detail: confirm the specific property's zone, the asset conditions, the current costs, and the right holding structure before you commit, and treat Makkah, Madinah, and residency as separate questions in their own right.
Conclusion
The Law of Real Estate Ownership and Investment by Non-Saudis, in force from 21 January 2026 under Royal Decree No. M/14, is a genuine turning point. It replaces a discretionary, permit-led regime with a zone-based system in which non-Saudi individuals and entities can hold title and other property rights as a matter of right within designated areas. Backed by Vision 2030 and supported by modern digital registry infrastructure that even recognises tokenised, fractional ownership, the reform signals a market that is far more open to international capital than it was.
Openness, however, is not the same as a free-for-all. The framework operates through designated zones, attaches conditions by asset type, treats Makkah and Madinah as a separate and restricted question, connects to residency through the Premium Residency programme rather than automatically, and carries costs such as a reported disposal fee of up to 5 percent. Several of the operative details sit in implementing regulations that have continued to be issued and refined, which is precisely why verifying current figures and zone boundaries before acting matters so much.
Professional guidance earns its place at the intersections: confirming that a specific property and intended use fall within an approved zone, choosing whether to hold personally or through a structure, aligning that structure with any operating presence and the investor's wider footprint, and coordinating the property decision with residency, succession, and tax planning. AURNE works with international investors and businesses across exactly these points, from company formation in the Kingdom to worldwide structuring and the full range of advisory services. Handled deliberately, the 2026 reform is not just access to a new market; it is an opportunity to enter it on a clean, well-governed footing.