Saudi Arabia's 2026
Real Estate Law

Saudi Arabia Just Opened Real Estate to Foreigners

Saudi Arabia's Law of Real Estate Ownership by Non-Saudis was published in July 2025 and took effect in January 2026, roughly 180 days later. For the first time, non-Saudi individuals and companies can own property in designated zones across the Kingdom, a major shift from the historically restrictive ownership regime. For American expats, this is a genuine opportunity, but it also opens a new category of US tax reporting that didn't previously apply to most Americans in Saudi Arabia.

What the Law Actually Allows

Foreign residents: Non-Saudis legally residing in the Kingdom can own property within designated zones, plus one residential property outside those zones for personal use.

Foreign companies: Foreign-owned business entities, listed and unlisted, along with licensed investment funds, can acquire real estate needed for business operations and employee housing, including inside the designated zones.

Geographic scope: Designated zones are expected in high-demand areas such as Riyadh and Jeddah. Ownership outside approved zones generally isn't permitted, and Makkah and Madinah remain off-limits except for Muslim resident expatriates purchasing within designated zones under specific conditions.

Fees: All purchases must be registered in the national Real Estate Registry, and the Real Estate General Authority can levy a transfer fee of up to 5% of the property's value on disposals by non-Saudis.

Worked Example: Buying and Renting a Riyadh Apartment

Scenario: You purchase an apartment in a designated Riyadh zone for $400,000 and rent it out for $28,000 a year, with $8,000 in deductible expenses.

FAQ: Saudi Arabia's 2026 Real Estate Law

Q: Can I buy property anywhere in Saudi Arabia now? A: No. Ownership is limited to designated zones plus, for residents, one personal-use residential property outside those zones. Makkah and Madinah remain restricted except for specific cases involving Muslim resident expatriates.

Q: Do I owe US tax on the purchase itself? A: No, buying real estate isn't a taxable event. Tax obligations arise once the property generates rental income or is later sold at a gain.

Q: Does FBAR apply to the property itself? A: No, FBAR covers financial accounts, not directly-held real estate. But rental proceeds sitting in a Saudi bank account do count toward your FBAR aggregate threshold.

Q: Should I buy in my personal name or through an entity? A: Depends on your liability exposure, estate planning goals, and whether you plan to scale up to multiple properties. This is worth a specific consultation before you sign anything.

Q: Do I need to report the purchase itself on FBAR or FATCA? A: Directly-held real estate isn't a financial account, so it doesn't trigger FBAR or FATCA on its own. But any Saudi bank account used to fund the purchase or collect rent does count toward those thresholds.

Q: What about financing the purchase through a Saudi bank? A: A Saudi mortgage is a loan, not a reportable financial account, but confirm with a specialist how loan structuring interacts with your broader US reporting, particularly if the loan involves an entity rather than your personal name.

Related reading: US Expat Taxes in Saudi Arabia 2026, Filing US Taxes from Saudi Arabia.

Key Topics for Americans in Saudi Arabia

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