Saudi’s new law: Foreigners may have assets across the state, except in these two cities. world News
TL; Dr.
- Foreigners can now own property in Saudi Arabia but only in specific areas and under clear rules.
- Ownerships in holy cities such as Mecca and Medina are still mostly banned.
- Non-laws should record their own ownership, and are fees and punishment for violations.
Saudi Arabia has recently published a new law which changes how foreigners may have real estate in the state. This law, officially announced on 25 July in UMM al-Qura Gazette, will start applying 180 days with its release. This is a major change in policy as it allows non-surprise, whether individuals, companies, or organizations to buy and keep property under certain conditions.Earlier, the rules were more restrictive, especially in holy cities such as Mecca and Medina. The new law still protects these cities by limiting ownership, but it also opens new opportunities for foreigners in other areas. This change comes as part of Saudi Arabia’s comprehensive plan to attract investment and encourage economic growth, but with clear boundaries to protect cultural and religious sensitivity.
What the new law allows
- Foreign Ownership Area: The government will define specific areas where foreign assets can be purchased. These areas will come with the rules about how much property can be owned and how long.
- Types of Rights: Ownership is not just about buying a building. The law includes rights such as Usufruct (right to use and profit from property), patches and other property interests.
- Person and Corporation: Both Saudi Arabia and foreign companies can own property owners. For individuals, a house owner outside the restricted areas is allowed for personal use. Companies can buy property to support their business or home staff.
- Diplomatic and International Uses: Foreign Embassy and International Organizations may own property for their official work, but they need approval from the Saudi Foreign Ministry.
Ownership area and rights
The government will nominate some areas where foreigners are allowed their own property. In these areas, limitations will be defined on the period of ownership percentage and property rights. The law includes various types of rights, including full ownership, lease and usufruct rights, which means its use and right to use it without its use and profit. Foreign persons legally living in Saudi Arabia can only own a residential property outside the restricted areas for individual use. Foreign companies can buy property throughout the state to support their business operations or provide housing for employees. Under approval from the Ministry of Saudi Foreign Foreign, diplomatic missions and international organizations may also own property for official objectives.
Restriction in holy cities
The law holds strict boundaries over the ownership of foreign property in the holy cities of Mecca and Medina. Only Muslim people can own property there, and even then, ownership is allowed only under specific circumstances. Foreign residents are also banned to own only one house for individual housing outside these restricted areas. This ensures that religious and cultural sensitivity is respected when opening other parts of the country for foreign ownership.
Registration, fee and punishment
Owners of foreign property should register their own ownership with the National Real estate registry to be legally recognized. The law offers up to 5% transfer fee on property transactions related to foreigners. Violation of law may lead to heavy fines up to SAR 10 million (about $ 2.67 million). In severe cases, such as using fake documents, officers can force property sales, with income going into the state after necessary deductions. To monitor and implement these rules, a committee under the Real Estate General Authority will investigate and impose punishment. Property owners have the right to appeal for the committee’s decision in administrative courts within 60 days.
Current ownership and protection of GCC citizens
The law protects all foreign property rights that existed before it was enacted, so the current foreign owners will not lose their rights. It also removes an earlier ban that prevented citizens of the Gulf Cooperation Council (GCC) from owning property in Mecca and Medina. Now, GCC citizens are subject to the same rules as other foreigners, which simplify the legal structure around foreign ownership in the state.
what comes next
The Saudi government has planned to issue executive rules within six months. These will provide details on geographical boundaries for foreign ownership areas and explain how the law will be implemented in practice. Foreign buyers and investors should see for these updates to see where and how they can buy property legally in Saudi Arabia.questions to ask1. Can a foreigner now buy property anywhere in Saudi Arabia?No. Foreign ownership is limited to the specified areas by the government. Ownership in holy cities is mostly restricted.2. What type of property rights are allowed?Foreign people can own lump sum property based on the regions of the region or hold other rights such as leases and usufruct.3. What happens if a foreign ownership breaks the rules?They can be fined up to SAR 10 million, and in severe cases, their assets can be sold by the authorities with income leaving in the state.
