Introduction: Foreigners Can Now Buy Property in Makkah and Madinah
For decades, owning property in Makkah and Madinah was restricted to Saudi nationals and select GCC citizens. However, with Saudi Arabia’s latest legal reforms, foreigners can now legally purchase residential and commercial properties in these sacred cities.
This change aligns with Vision 2030, which aims to boost foreign investment in Saudi real estate. Whether you’re looking to buy property in Makkah for investment or want to own an apartment in Madinah, this step-by-step guide will help you navigate the process smoothly.
For a detailed legal breakdown, read this complete guide on how foreigners can buy property in Makkah and Madinah.
Legal Requirements: Understanding Visa, Residency, and Ownership Laws
Before purchasing property in Saudi Arabia, it’s important to understand the legal framework for foreign investors.
✅ Who Can Buy Property in Makkah and Madinah?
- Foreign investors with Ministry of Investment (MISA) approval.
- Expats residing in Saudi Arabia with a valid Iqama (residency permit).
- International buyers investing through listed real estate companies.
❌ Who Cannot Buy Property?
- Tourists and visitors on short-term visas.
- Companies or individuals without government approval.
- Foreigners wanting to purchase government-owned or restricted properties.
To get more details about legal regulations, check out this comprehensive guide on Saudi real estate laws.
Step-by-Step Buying Process for Foreigners
1️⃣ Research & Select the Right Property
- Decide on the type of property – residential apartment, serviced residence, or commercial unit.
- Look for properties near Masjid Al-Haram in Makkah or Masjid an-Nabawi in Madinah for high rental demand.
- Check out the latest hot property investment locations before making a decision.
2️⃣ Verify Ownership & Legal Status
- Ensure the property is registered with the Saudi Real Estate General Authority (REGA).
- Work with licensed real estate agents and avoid unregistered sellers.
3️⃣ Obtain Government Approval (MISA License)
- Foreigners must apply for approval from the Ministry of Investment (MISA) before finalizing the purchase.
- The process includes background verification, financial proof, and investment justification.
4️⃣ Secure Financing & Payment Plan
- Choose between mortgages from Saudi banks or developer-backed installment plans.
- Consider using a Saudi REIT (Real Estate Investment Trust) if you prefer indirect ownership.
According to Reuters, Saudi Arabia has recently allowed foreign investors to invest in publicly listed companies owning real estate in Makkah and Madinah, enhancing opportunities for international investors.
5️⃣ Sign the Purchase Agreement
- Review all terms and conditions carefully.
- Ensure government taxes and service fees are covered in the contract.
6️⃣ Register the Property & Complete the Transfer
- Submit documents for title deed registration under the Saudi Real Estate General Authority.
- Pay any applicable Zakat or real estate transaction fees.
For more insights into the financial side of property ownership, read this guide on real estate taxes in Saudi Arabia.
Financing Options: How to Pay for Your Property?
Foreign investors have several financing options when buying property in Makkah and Madinah.
🏦 1. Saudi Bank Mortgages
- Available for expats with a valid Iqama.
- Requires a down payment of 10-30%.
- Interest rates depend on your credit score and income.
🏗 2. Developer Payment Plans
- No bank approval required.
- Installments over 3-7 years.
- Available for off-plan projects.
💼 3. REIT (Real Estate Investment Trusts)
- No need for direct ownership.
- Earn rental income from property funds.
- Best for international investors without residency.
If you need guidance on choosing the right financing option, check out these essential tips for buying property in Saudi Arabia.
Tax Implications & Financial Considerations
When buying property in Saudi Arabia, foreigners should be aware of taxes and financial obligations.
📌 1. Real Estate Transaction Tax
- 5% VAT applies to commercial property sales.
- Residential sales are VAT-exempt if directly bought from the developer.
📌 2. Zakat (Islamic Tax)
- Investors may need to pay **