The rulebook (and price) for foreign property ownership is here

The rulebook that lets foreigners buy into Saudi’s property market is finally here, nearly six months after the law went into effect in January. The executive regulation, outlined in the Official Gazette (Umm Al-Qura) on Friday, includes detailed registration requirements, a transfer fee, a new portal to manage the process, and penalties for violations.

The headline: The rules set a 2% fee when a non-Saudi disposes of a real estate right in Riyadh, Makkah, Madinah or Jeddah. The good news is that it’s well below the 5% ceiling the law allowed. The bad news? It comes on top of the 5% real estate transaction tax (RETT) that already applies to all sales. Still, the fee is zero outside the four cities, and is waived under certain conditions including inheritance and public-interest expropriation.

REMEMBER- The Kingdom has designated multiple ownership zones across the four cities, with each city following a different strategy. Riyadh limits access to nine zones centered on flagship giga-projects and a transit-oriented development site, while Jeddah opens its city center alongside 55 development zones. Makkah designates 11 developments and Madinah 10, focused on pilgrimage, hospitality, and mixed-use projects.

A foreign buyer now has a concrete checklist. A non-resident individual needs an Interior Ministry digital identity, a local bank account, and a Saudi phone number tied to that identity before owning. Foreign companies register with the Investment Ministry, disclose their direct and indirect owners, keep a Saudi-issued legal representative, and flag any 5%-plus ownership change within 15 days.

Unlisted Saudi firms with foreign shareholders get a separate track: Inside the zones — the holy cities included — they can buy for operations or staff housing without the ministry's sign-off. Outside the zones, where the two holy cities are off-limits, they need it.

Everything runs through one portal, and misrepresentation is expensive. REGA operates a single electronic portal for non-Saudi ownership and disposals, linked to the property registry. Payments must clear electronically under Saudi Central Bank rules. A foreign buyer who submits false information to acquire property faces a fine of up to 5% of the right’s value, capped at SAR 10 mn, plus a forced sale. Lesser breaches carry graduated fines that escalate with each offence, though violators get 10-180 days to fix the problem first.

What’s next: Watch for the first foreign transactions to clear the portal, the real test of whether the plumbing works. Then watch whether the zone map widens beyond the gigaprojects, and whether the holy cities’ tighter conditions channel or chill Gulf and wider Muslim-investor demand.