Saudi Arabia sets SR10M fines in new foreign property rules

Key Takeaways

• Non-resident foreigners must obtain Ministry of Interior digital identity and Saudi bank account before purchasing property
• Foreign companies must disclose all beneficial owners and report ownership changes of 5% or more within 15 days
• A unified electronic portal through REGA will handle all foreign property transactions with mandatory electronic payments

Saudi Arabia published executive regulations governing foreign property ownership on July 3, establishing digital identity requirements, bank account mandates, and penalties reaching SR10 million ($2.67 million) for violations. The rules create a single electronic platform through the Real Estate General Authority for all non-Saudi property transactions.

What do foreign individuals need to buy property?

Non-resident foreign individuals face three prerequisites before purchasing real estate or acquiring any property right in the Kingdom. They must obtain a Ministry of Interior-approved digital identity, open a Saudi bank account in their own name, and register a Saudi mobile number linked to that digital identity.

The requirements tie every financial and legal transaction to officially authenticated records. This closes a gap that previously made it difficult to track foreign ownership chains or enforce compliance.

Stricter disclosure rules for foreign companies

Foreign companies seeking Saudi property must register with the Ministry of Investment, fully disclose direct and indirect beneficial owners, appoint a legal representative holding an approved Saudi identity, and maintain a company bank account in the Kingdom.

The Ministry of Investment will issue a registration number once requirements are met. But the obligations continue. Companies must notify the ministry within 15 days if ownership of 5% or more changes, whether through a single transaction or multiple transactions. The same notification window applies if governance arrangements in the country of incorporation allow another party to influence company decisions or reduce its independence.

Foreign non-profits face similar scrutiny. They must register with the National Center for Non-Profit Sector Development, disclose individuals exercising direct or indirect control, appoint an authorized representative with Saudi identity credentials, and report significant structural changes within 15 days.

One portal for all transactions

The Real Estate General Authority will establish a unified electronic portal linked to the national Real Estate Registry. This portal becomes the exclusive channel for foreign property applications, whether for Saudi companies with foreign shareholders, direct foreign purchases, or property disposals.

All financial transactions related to property purchases must clear through electronic payment systems approved by the Saudi Central Bank before title deeds transfer through the registry. The regulations explicitly prohibit alternative payment methods for foreign buyers.

Family ownership limits and company carve-outs

The regulations prevent multiple residential purchases within a single foreign family. A foreign spouse and non-Saudi children count as dependents when acquiring residential property. They cannot separately own another residence unless the son or daughter reaches age 25.

Unlisted Saudi companies with foreign shareholders receive a partial exemption. They may own property outside designated foreign ownership zones, excluding Makkah and Madinah, after Ministry of Investment approval. The property must serve business operations or employee housing. Within approved ownership zones, including Makkah and Madinah, these companies can acquire property without ministry approval, subject to conditions in the law.

2% transaction fee with ten exemptions

A 2% fee applies to transactions involving real estate rights acquired by non-Saudis in Riyadh, Jeddah, Makkah, and Madinah. The fee targets the kingdom's four largest property markets where foreign demand concentrates.

Ten categories of transactions escape the fee. These include donations to endowments and government entities, returning property to its previous owner within 180 days under specified conditions, dividing jointly owned property without increasing ownership shares, and transactions involving diplomatic missions under reciprocity arrangements. Transfers to wholly owned companies or investment funds are also exempt, as are sales of real estate units developed on foreign-owned land if project completion and sale deadlines are met.

Enforcement and penalties

REGA-appointed inspectors hold authority to investigate and document violations. Legal notifications count as valid if delivered through communication channels registered on the electronic portal or via text messages to officially registered Saudi mobile numbers.

The SR10 million maximum penalty sits at the top of a graduated enforcement structure. REGA will publish a procedural guide explaining implementation details, but the regulations already establish the penalty ceiling.

Vision 2030 context

The regulations complement geographic zones where non-Saudis can own property, approved separately. Knight Frank estimates Saudi Arabia's real estate market will reach $620 billion by 2030. With approximately 13 million foreign residents comprising 30% of the population, the ownership pathway addresses a significant constituency.

The rules also support megaprojects like NEOM, targeting 7.5 million residents, where foreign ownership zones are expected. Riyadh alone holds 1.3 million expatriates who could potentially benefit from clearer ownership rights.

Frequently Asked Questions

Can foreigners buy property anywhere in Saudi Arabia?

No. Foreigners can only purchase property in designated geographic zones. Makkah and Madinah have additional restrictions, and unlisted companies with foreign shareholders need Ministry of Investment approval for properties outside approved zones.

What happens if a foreign company fails to report ownership changes?

The regulations authorize penalties up to SR10 million ($2.67 million) for violations. REGA-appointed inspectors can investigate and document non-compliance.

Do foreign families face purchase limits?

Yes. A foreign spouse and non-Saudi children count as dependents when buying residential property. They cannot own separate residences unless children reach age 25.

How are payments processed for foreign property purchases?

All financial transactions must clear through Saudi Central Bank-approved electronic payment systems before title deeds transfer. Alternative payment methods are not permitted for foreign buyers.

When do the new regulations take effect?

The executive regulations were published July 3, 2026. REGA will issue a procedural guide with implementation details, though the specific timeline has not been announced.

Source: https://saudigazette.com.sa / Saudi Gazette