Dubai or Riyadh? What Saudi Arabia's 2026 foreign ownership law means for Gulf investors
Saudi Arabia opened real estate to foreign buyers in January 2026. How the new law compares with Dubai's freehold market for GCC and international investors.
The short answer
Since January 2026, non-Saudis can own registered property in zones designated by Saudi Arabia's Real Estate General Authority, under the Law of Real Estate Ownership by Non-Saudis. Combined fees and taxes are reported at around 10%. Dubai's freehold market is two decades older, with an escrow regime, a 4% transfer fee and deep resale liquidity. For most investors the two are complements, not substitutes.
Key takeaways
- Saudi Arabia’s new law took effect in January 2026 and lets foreign individuals and companies own registered property in designated zones.
- Zones and limits are published by the Real Estate General Authority (REGA), city by city.
- Costs: combined fees and taxes on foreign ownership were reported at around 10%. Penalties for violations reach SAR 10 million.
- Dubai offers freehold ownership in designated areas since the early 2000s, a 4% DLD fee, escrow-protected off-plan, and a deep resale market.
What the Saudi law does
The Law of Real Estate Ownership by Non-Saudis, approved in July 2025 and effective from January 2026, opens ownership to:
- foreign individuals, residents or not, within the rules
- foreign companies, and Saudi companies with foreign shareholders
- non-profit entities and diplomatic missions, for specific purposes
Ownership is limited to registered properties in zones REGA designates, with maps covering Riyadh, Jeddah and other governorates and setting permitted ownership percentages, property types and procedures. Makkah and Madinah are subject to special conditions. Buyers must disclose required information, and property acquired using false information can be publicly auctioned.
Side by side
Dubai’s depth is the main difference today: it recorded more than 270,000 real estate transactions worth AED 917 billion in 2025, with 193,100 investors, according to the Dubai Media Office.
“…a more mature and sustainable market underpinned by transparency, governance, and data-driven policies.”
Omar Hamad Bu Shehab, Director General, Dubai Land Department, on the 2025 results
| Dubai | Saudi Arabia (from 2026) | |
|---|---|---|
| Foreign freehold | Yes, in designated areas, since the early 2000s | Yes, in REGA-designated zones |
| Main transaction cost | 4% DLD transfer fee | Fees and taxes reported at ~10% combined for foreigners |
| Off-plan protection | Escrow under Law No. 8 of 2007 | Developing; check project-level arrangements |
| Residency through property | Golden Visa at AED 2m+ | Separate premium residency programmes |
| Resale liquidity | Deep; 214,912 sales transactions in 2025 | New market for foreign buyers |
| Personal income tax on rent | None | None for individuals (check Zakat/other obligations for companies) |
How Gulf investors are thinking about it
- Diversification, not replacement. Dubai remains the liquid, proven market. Saudi Arabia is a growth story tied to giga-projects and a fast-growing population.
- Exit matters. In Dubai you can model resale demand from years of DLD data. In Saudi Arabia, the foreign resale market is only now forming.
- Rules are still being published. Until zone maps and procedures are final for the city you want, treat any Saudi purchase as early-stage.
GCC nationals in Dubai
GCC nationals generally enjoy broader ownership rights in Dubai than other foreigners, and the buying process is otherwise the same. Fees, escrow rules and mortgage caps apply equally. See the cost breakdown and the off-plan checklist.
Frequently asked questions
Can foreigners buy property in Saudi Arabia now?
Yes. From January 2026, non-Saudis can own registered property in zones designated by the Real Estate General Authority, subject to the conditions for each zone.
Can foreigners buy property in Makkah and Madinah?
The law covers these cities with special conditions. Check REGA’s published rules for each city before planning a purchase.
Is Dubai cheaper to buy into than Saudi Arabia?
On transaction costs, Dubai’s 4% DLD fee is lower than the roughly 10% combined fees and taxes reported for foreign owners in Saudi Arabia. Prices, yields and growth prospects differ by city and asset, so compare specific properties.
Sources
- Gulf News: new Saudi rules on foreign property ownership from 2026 (Nov 2025)
- Gulf News: Saudi Arabia opens property market to foreigners in 2026
- Real Estate General Authority (REGA)
- Gulf News: Dubai property market closes 2025 with record Dh682.5 billion in sales
- Government of Dubai Media Office: Dubai’s real estate market records new historic milestone, AED 917 billion in 2025 (12 January 2026)
General information, not legal, tax or financial advice. Rules change; this guide was last checked on 12 October 2026. Confirm the details for your situation with a licensed professional before you act.
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