The State Properties General Authority published an overview (pdf) of the new law governing real estate expropriation for public interest and temporary seizure last week, after securing cabinet approval on Tuesday. The law, which takes effect 120 days after appearing in the official gazette, aims to accelerate urban development, expand infrastructure, and stimulate economic growth while ensuring fair compensation for affected property owners.

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Compensation will be based on the property’s market value plus an additional 20% premium to offset losses. The law also permits in-kind compensation, such as granting alternative land or property with a market value 20-40% higher than the original property, and grants tax exemptions on replaced properties for up to five years.

In cases of temporary seizure — where authorities make use of property without transferring ownership — owners will receive rent equivalent to market rates with an added 20% premium, along with reimbursement for any related damages. Tenants and other rights holders may also claim compensation, with temporary seizures limited to three years and extendable once for a similar period with the owner’s consent.

To protect property rights, expropriation is only permitted if:

  • No suitable state-owned land is available;
  • The project clearly serves public interest;
  • The project owner demonstrates financial capacity to pay fair compensation.

The law specifies qualifying projects for the public interest, including public transport and road infrastructure, urban development and public services, projects related to the Holy Mosques and pilgrimage routes, power, water and communication infrastructure, mining-related activities, environmental and heritage preservation projects, and security or military installations.

Property valuations will be conducted by three independent certified appraisers working separately, with findings reviewed by a dedicated committee to ensure accuracy, transparency, and consistency. Owners may request reassessment if compensation is delayed beyond three years.

Procedures and timeline: Once a project owner submits a request to the State Properties General Authority, the Expropriation and Temporary Seizure Committee must approve or reject it within 60 days. After a decision is published in the official gazette, the project owner has 60 days to complete a full property inventory. Three certified appraisers assess compensation and prepare an inventory report, which is then reviewed by the authority within 90 days. Compensation payment, property evacuation, and title deed transfer must follow within 90 days after finalizing all payment documents.

REMEMBER- The government has rolled out sweeping reforms to stimulate the real estate market — opening property ownership to non-Saudis, permitting foreign investment in Makkah and Madinah real estate firms, lifting development curbs on 81 sq km of land in northern Riyadh, and amending the White Land Tax law. It also plans to release 10k-40k affordable residential plots annually.

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