Saudi Arabia has introduced detailed implementing regulations governing how non-Saudi individuals, foreign companies, foreign-owned Saudi companies and other qualifying entities can acquire, hold and dispose of real estate rights in the Kingdom.

The Council of Ministers approved the regulations on 23 June 2026, and the official text was published in Umm Al-Qura on 3 July 2026. The regulations implement the Law of Real Estate Ownership by Non-Saudis, which entered into force on 22 January 2026 and replaced the previous ownership framework dating from 2000.

Among the most significant developments is a 2% non-Saudi real estate disposition fee applying within Riyadh, Makkah, Madinah and Jeddah Governorate. The regulations also establish pre-acquisition identity and registration requirements, beneficial ownership disclosures, electronic payment obligations, zero-rate cases and a detailed penalty framework.

Regulatory Warning: The 2% charge should not automatically be described as a universal foreign-buyer acquisition tax. The regulations frame it as a fee imposed on the value of a non-Saudi’s disposition of real rights. The legal and contractual responsibility for each charge must be reviewed for the particular transaction.

This guide focuses specifically on the new implementing regulations. Buyers seeking a broader overview of ownership eligibility, geographical zones and property rights should first read our guide to foreign property ownership in Saudi Arabia.

What Do the 2026 Implementing Regulations Change?

The original ownership law establishes the broad legal framework. The implementing regulations explain how that framework operates in practice.

The regulations address:

• Pre-acquisition requirements for non-resident individuals

• Registration of foreign companies and non-profit entities

• Disclosure of direct and indirect ownership

• Changes that must be reported within 15 days

• Electronic applications and payment procedures

• Property ownership by foreign-owned Saudi companies

• The 2% non-Saudi disposition fee

• Transactions receiving a zero rate

• Inspection and enforcement procedures

• Penalties for false information and non-compliance

These provisions apply alongside the geographical-scope decisions that determine where non-Saudis can acquire property, which property rights are available and what ownership limits or conditions apply.

Key Regulations at a Glance

Who Is Considered a Non-Saudi?

The law defines a non-Saudi broadly. It includes:

1. A natural person who does not hold Saudi nationality

2. A company incorporated outside Saudi Arabia

3. A non-Saudi non-profit entity

4. Another non-Saudi legal person designated by a Council of Ministers decision

The rules for a foreign individual are different from those applying to a foreign company, Saudi company with foreign shareholders, listed company, investment fund or non-profit entity.

The law also preserves any more favourable rights available under other Saudi legislation. GCC nationals, for example, may have rights under the separate GCC real estate ownership framework rather than relying exclusively on the general non-Saudi regime.

Where Can Non-Saudis Own Property?

Non-Saudis may own real estate or acquire other rights in rem within geographical areas approved by the Council of Ministers.

For each area, the Council of Ministers can determine:

• Which locations are available

• Which buyer categories can acquire rights

• The types of real rights available

• Maximum foreign ownership percentages

• Maximum usufruct periods

• Property-use restrictions

• Additional regulatory conditions

The geographical scope is therefore more precise than a simple list of cities. A city may be included in the foreign ownership framework without every neighbourhood, project or plot being available to every foreign buyer.

Regulatory Warning: A property advertisement stating that a project is “foreign ownership approved” does not independently prove eligibility. The exact property, legal right, ownership percentage and buyer category must be verified through the official system.

Can a Foreign Resident Own a Home Outside the Approved Zones?

The underlying law allows a non-Saudi natural person who is legally resident in Saudi Arabia to own one property for personal residential use outside the approved geographical scopes.

This exception does not apply in Makkah or Madinah.

The implementing regulations further state that the non-Saudi resident’s spouse and non-Saudi descendants are treated as dependants for this personal-home route. They cannot independently acquire another personal residence through the same exception unless the marriage has ended or the descendant has reached the age of 25.

This provision should not be interpreted as allowing an entire family to purchase multiple investment homes outside approved ownership areas.

What Must a Non-Resident Individual Complete Before Buying?

A non-Saudi natural person who does not live in Saudi Arabia must complete three requirements before acquiring a property or another real right:

1. Obtain a Saudi-approved digital identity

2. Open a Saudi bank account in the individual’s name

3. Obtain a Saudi mobile number registered in the individual’s name and linked to the digital identity

These are formal pre-acquisition requirements rather than optional administrative conveniences.

A non-resident buyer will also normally need to satisfy identity, anti-money-laundering, source-of-funds and property-registration checks during the transaction.

Our detailed guide to buying property in Saudi Arabia as a foreigner explains how these requirements fit into the wider purchase process.

What Must a Foreign Company Complete Before Acquiring Property?

A company incorporated outside Saudi Arabia must register with the Ministry of Investment before acquiring property or another real right.

The company must:

• Complete the prescribed Ministry of Investment registration

• Disclose its direct owners

• Disclose its indirect owners

• Appoint a legal representative holding a Saudi-issued identity

• Open a Saudi bank account in the company’s name

• Obtain the required company registration number

This process should not be described as a generic individual property approval. It is a corporate registration and disclosure requirement applying to a foreign legal entity.

Foreign investors can review the separate corporate considerations in our guide to foreign company property ownership in Saudi Arabia.

The 15-Day Company Notification Rule

A registered foreign company must notify the Ministry of Investment within 15 days when:

• Ownership of 5% or more of the company is transferred, whether through one transaction or several transactions

• Internal arrangements or foreign-country regulations restrict the company’s independence

• Another person gains meaningful influence over the company’s decisions or actions

• Another reportable situation specified by REGA occurs

This means that property compliance continues after the acquisition. A foreign company cannot treat its Ministry of Investment registration and ownership disclosure as a one-time exercise.

Regulatory Warning: A 5% ownership change can trigger notification even when the change occurs through several connected transactions rather than one transfer.

How Do the Rules Apply to Foreign-Owned Saudi Companies?

A Saudi company that is not listed on the Saudi capital market and has one or more non-Saudi shareholders can acquire property within approved geographical scopes, including Makkah and Madinah, without obtaining separate Ministry of Investment approval for that in-scope acquisition.

Outside the approved geographical scope, the same company can acquire property for:

• Carrying out its registered business activities

• Providing housing for its employees

However, outside-scope acquisition requires prior Ministry of Investment approval and cannot use this route to acquire property in Makkah or Madinah.

The company must be able to demonstrate a genuine operational or employee-housing need. Providing inaccurate information about that need can result in substantial penalties.

How Do the Rules Apply in Makkah and Madinah?

For direct acquisition by a non-Saudi natural person, property ownership or another permitted real right in Makkah and Madinah is limited to Muslim individuals.

Foreign-owned Saudi companies can follow the separate company route within the approved geographical scope. Listed companies, licensed investment funds and special-purpose entities operate under applicable Capital Market Authority controls.

The regulations should not be interpreted as opening every property in the two holy cities to international ownership.

The buyer must still verify:

• Religious eligibility for the individual route

• Geographical-scope eligibility

• Property type

• Available real right

• Registered use

• Ownership percentage

• Transfer conditions

Read our dedicated guide to how foreigners can buy property in Makkah and Madinah for a detailed explanation.

What Is the New 2% Non-Saudi Property Fee?

The underlying ownership law allows REGA to impose a fee of no more than 5% on the value of a non-Saudi’s disposition of real rights.

The implementing regulations set the current fee at 2% for qualifying dispositions within:

• Riyadh

• Makkah

• Madinah

• Jeddah Governorate

The 2% rate applies to all listed types of real rights and property uses within those four locations.

Is the 2% Fee Charged Everywhere in Saudi Arabia?

No.

Under the current regulations, dispositions outside the four listed locations receive a zero rate for this particular non-Saudi fee.

That does not necessarily make an outside-area transaction free of all taxes or costs. RETT, legal fees, brokerage fees, registry costs and other charges may still apply.

Does the 2% Fee Apply to the Buyer or Seller?

The regulatory text describes the charge as a fee on the value of a non-Saudi’s disposition of a real right.

This wording is important. It should not automatically be presented as a universal surcharge imposed merely because a foreign individual buys a property.

The actual transaction should be reviewed to determine:

• Who is making the relevant disposition

• Which party is legally required to register or settle the fee

• Whether the transaction qualifies for a zero rate

• Whether the contract shifts the economic cost between the parties

Regulatory Warning: Marketing material that simply adds 2% to every foreign buyer’s purchase price may be legally oversimplified. The transaction structure and identity of the disposer must be checked.

How Is the 2% Fee Different From RETT?

The non-Saudi ownership fee and Real Estate Transaction Tax are separate charges created under different legal frameworks.

ZATCA confirms that RETT is imposed at 5% on taxable real estate transactions. Sales of real estate are generally exempt from VAT, while commercial rents are subject to 15% VAT and residential rents are exempt.

For a wider explanation of Saudi property taxation, read our guide to real estate taxes in Saudi Arabia.

Illustrative Cost Example

Consider a qualifying property disposition valued at SAR 2 million in one of the four listed locations.

This example assumes both charges apply and does not allocate legal responsibility between the parties. It also excludes brokerage, legal review, valuation, translation, financing and registry-related expenses.

Which Transactions Receive a Zero Rate for the 2% Fee?

The implementing regulations identify several cases in which the non-Saudi disposition fee is charged at zero.

For a property returned to the original non-Saudi owner, the return must occur within 180 days of documenting the first transaction. The property description and agreed consideration must remain unchanged.

For developed units, the non-Saudi must complete development within the licence period and sell the resulting units no later than one year after the development licence expires.

Regulatory Warning: A zero rate is not the same as an automatic exemption from RETT or every other transaction cost. Each charge has its own law, conditions and filing procedure.

How Will Applications and Payments Be Processed?

REGA is required to establish an electronic portal for:

• Non-Saudi property ownership applications

• Acquisition of other real rights

• Disposals of property rights

• Applications by Saudi companies with non-Saudi shareholders

The portal will be connected to the Real Estate Registry.

All financial transactions connected with the acquisition, holding or disposal of these rights must use approved electronic payment methods under the Saudi Central Bank’s payment framework.

Final ownership procedures, issuance of title instruments and registration of the real right are completed through the Real Estate Registry.

Regulatory Warning: Cash payments, informal transfers or payments to an unauthorised third party can create serious registration, compliance and source-of-funds problems.

Why Real Estate Registry Registration Still Matters

Ministry of Investment registration, digital identity approval and portal submission do not themselves transfer ownership.

The acquired property or real right becomes legally valid after it is registered in the Real Estate Registry under the applicable registration rules.

A buyer should confirm that the final registry record correctly states:

• Buyer or right-holder name

• Property number

• Property location and boundaries

• Property use

• Type of real right

• Ownership percentage

• Usufruct period where applicable

• Mortgages

• Easements

• Restrictions

• Other registered obligations

A signed contract, reservation form or payment receipt should not be treated as a substitute for successful registry completion.

What Are the Penalties for Non-Compliance?

The regulations introduce a structured penalty system.

Serious Fraud or Misleading Information

A non-Saudi who deliberately provides false or misleading information that results in acquiring a property or another real right can face:

• A fine equal to 5% of the right’s value

• A maximum fine of SAR 10 million

• A compulsory sale of the property right

The sale proceeds returned to the offender can be reduced by fines, taxes, other charges and sale expenses.

Repeated Compliance Violations

The enforcement committee can allow a correction period of between 10 and 180 days, depending on the nature of the violation and the steps required to correct it.

Who Is Most Affected by the Regulations?

Non-Resident Individual Buyers

They must establish a digital identity, Saudi bank account and linked Saudi mobile number before acquiring property.

Foreign Companies

They must register with the Ministry of Investment, disclose direct and indirect owners and maintain ongoing ownership-change monitoring.

Foreign-Owned Saudi Companies

They must distinguish between acquisitions inside approved geographical areas and operational or employee-housing acquisitions outside those areas.

Non-Saudi Non-Profit Entities

They must register with the National Center for the Development of the Non-Profit Sector, disclose controllers and report material changes within 15 days.

Developers

They must model the 2% disposition fee, RETT, development licensing, unit-sale deadlines and buyer eligibility into project structures.

Investment Funds and SPVs

Listed companies, licensed funds and special-purpose entities remain subject to the Capital Market Law and CMA controls coordinated with REGA.

Practical Compliance Plan for Foreign Investors

1. Confirm the Buyer or Owner Category

Identify whether the transaction involves an individual, foreign company, foreign-owned Saudi company, fund, SPV or non-profit entity.

2. Check the Exact Geographical Scope

Confirm that the property and real right are legally available to that category of buyer.

3. Complete Registration Before Signing

Non-resident individuals should complete their digital identity and Saudi banking setup. Foreign companies should complete Ministry of Investment registration and ownership disclosure.

4. Identify the Disposer

Determine whether the 2% fee applies based on the identity of the party disposing of the real right and the property’s location.

5. Calculate Separate Taxes and Fees

Model the non-Saudi fee, RETT, VAT where relevant, brokerage, legal fees and registry costs separately.

6. Review Ownership-Change Controls

Foreign companies should implement a process to detect and report a transfer of 5% or more within the 15-day deadline.

7. Use Approved Electronic Payments

All transaction-related funds should pass through approved and traceable payment channels.

8. Complete Real Estate Registry Registration

Final payment and completion should be tied to successful registration of the correct right in the correct name.

Due Diligence Checklist

What Do the New Regulations Mean for Saudi Property Investment?

The regulations provide greater operational clarity than the original law alone.

Foreign individuals and companies now have clearer guidance on:

• What must be completed before acquisition

• How company ownership must be disclosed

• Which changes must be reported

• How transactions will be processed

• Where the 2% fee applies

• Which cases receive a zero rate

• What penalties apply for incorrect information

However, the rules also increase the importance of transaction structuring and ongoing compliance.

A property can be eligible for foreign ownership but still create legal or financial risk if:

• The wrong buyer entity is used

• A foreign company has incomplete ownership disclosure

• A 5% ownership change is not reported

• The 2% fee is incorrectly allocated

• RETT is omitted from the cost model

• The transaction is completed outside approved payment channels

• The real right is not correctly registered

Investors should combine regulatory analysis with property valuation, rental demand, development risk and exit planning. Our Saudi real estate investment guide for 2026 explains how legal eligibility and investment performance should be assessed together.

Final Guidance for Non-Saudi Property Owners and Buyers

Saudi Arabia’s implementing regulations have converted the 2026 foreign ownership law into a more detailed compliance system.

The most important practical points are:

1. Foreign ownership remains tied to approved geographical scopes.

2. Non-residents must complete Saudi identity and banking requirements.

3. Foreign companies must register and disclose direct and indirect owners.

4. A transfer of 5% or more in a foreign company must be reported within 15 days.

5. The 2% fee currently applies to qualifying non-Saudi dispositions in four specified locations.

6. The fee is separate from 5% RETT.

7. Several transactions receive a zero rate, but conditions must be satisfied.

8. All related financial transactions must use electronic payment methods.

9. Registration in the Real Estate Registry remains essential.

10. Deliberately false information can result in a fine and compulsory sale.

Real Estate Saudi provides research-led guidance on Saudi ownership laws, property zones, market opportunities and foreign-investor requirements.

For help evaluating a Saudi property opportunity, contact Real Estate Saudi.

This article provides general information and does not constitute Saudi legal, tax, accounting, financing or investment advice. Parties should obtain advice from qualified Saudi professionals and verify the latest position with REGA, the Ministry of Investment, ZATCA and the Real Estate Registry before completing a transaction.