Real estate in Saudi Arabia

Saudi Arabia, the guardian of the Islamic sanctuaries of Mecca and Medina, welcomes millions of pilgrims from all over the world every year. In recent years, the Kingdom has actively invested in infrastructure and real estate development.
Since 2000, there has been a law that allows foreigners to purchase property in Saudi Arabia. However, there are a number of restrictions.
Nationals of countries that are not members of the Arab Cooperation Council can only buy apartments in Saudi Arabia for their own use, without the right to rent them out. This means that the buyer must be a permanent resident of the property purchased.
At the same time, it is possible for international companies that have a business license for the Kingdom to buy properties for investment purposes - to employ staff or to rent them out.
Thus, if certain conditions are met, foreigners can become owners of real estate in one of the most closed Islamic countries.

Riyadh: The country's capital, Riyadh, is an important choice due to its economic prospects and urban lifestyle. This city offers unique opportunities for those who appreciate the variety of business and cultural events.

Jeddah: The coastal city of Jeddah attracts buyers looking to combine cultural heritage with the allure of seaside living. Its diverse cultural and leisure offerings make it attractive to those seeking an affluent lifestyle.

Dhahran / Khobar / Dammam: The Eastern Province, which includes Dhahran, Khobar and Dammam, is known for its economic activities, making it attractive to professionals and expatriates. Here, buyers will find modern amenities and opportunities for successful business investments.

When buying real estate, expatriates can either purchase a personal property to live in or invest in commercial real estate. However, there are two cities where the purchase of residential property by non-residents is prohibited - Mecca and Medina. This is to preserve the sacred status of Islamic cities for pilgrims.

In other regions of the country, the purchase of residential property by foreigners is also restricted or banned altogether for security reasons. However, the list of "free zones" could be expanded in the future as Saudi Arabia liberalizes its legislation.

1. Obtain written permission from the Ministry of Housing. This can take up to a year. You cannot buy a house without this permit.
2 Most transactions are settled in cash. Even if you have paid a deposit, the seller can sell the house to another buyer. Do not pay anything or sign anything without financial approval and legal advice.
3. The price is set privately between the buyer, the seller and the agents. Then you must go to the Sharia court to register the transfer of ownership.
4. The bank's lending must be in accordance with Islamic law. Interest is formally referred to as "profit". There are no penalties for late payments and the bank can only withhold collateral as a last resort.
5. After purchase, the property must be registered with the land registry and the appropriate tax paid.
6. The resale of real estate by foreigners is restricted. Saudi nationals have a preferential right of sale.
Therefore, if all conditions are met, a foreigner can buy a house in Saudi Arabia. However, the procedure is quite complicated and time-consuming.

Apartments: Prices for apartments in urban areas can range from 500,000 to 1,000,000 rials, depending on size and location. This option offers the convenience of city living and is often the preferred choice for those who value proximity to infrastructure.

Villas: Villas are popular with large families and people looking for spacious accommodation and can cost between 1,500,000 and 3,000,000 rial or more. This option offers comfort and a private setting that provides plenty of space and privacy.

Land plots: Buying land for new urban development projects offers the opportunity to choose the location for your own building plans. Land prices start at 300,000 rial and depend on the location and features of the plot.

It is important to note that land prices can fluctuate significantly and it is recommended to conduct more detailed market research to make an informed purchase decision.

Language barriers: For expats and foreign buyers in Saudi Arabia, language differences can pose a major challenge when negotiating contracts and understanding legal documents. To overcome this problem, it is advisable to hire an interpreter or a bilingual lawyer to ensure smoother and more accurate communication in the transaction.
Legal challenges: Real estate laws in Saudi Arabia can differ significantly from those in the buyer's home country, so professional legal assistance is required. Working with experienced lawyers who are familiar with the local laws will help to minimize the risks and ensure that all necessary legal requirements are met.
Property inspection: A thorough inspection of the property is an important step in the buying process as it can highlight potential problems or the need for repairs. Working with experienced real estate agents, document inspectors and attorneys will help ensure that the transaction goes smoothly and future problems are avoided.
Working effectively with experienced professionals such as estate agents, solicitors and translators is crucial to successfully dealing with these potential issues and gives you confidence and peace of mind when buying a property.

The ability to acquire real estate in Saudi Arabia through a company offers a number of advantages such as tax benefits and liability protection. This approach requires the establishment of a Saudi company, often a limited liability company (LLC), to acquire and manage the property. However, to successfully pursue this option, it is critical to consider the specific requirements, tax implications and legal aspects of owning real estate through a company.

Steps to purchase:

1. the formation of a company: The formation of a Saudi company, usually an LLC, provides the legal structure for the acquisition and ownership of real estate.
2. Legal support: Working with legal experts who specialize in Saudi real estate law is an essential part of the process. This will help to understand all legal aspects and ensure compliance with the country's laws.
3. Financial advice: Consulting with financial experts who are familiar with tax aspects will help optimize the financial strategy, including potential benefits and liabilities.

Important recommendations:

• Keep up to date with changes in the law: Real estate laws and regulations are subject to change, so it's important to regularly educate yourself and stay up to date.
• Professional advice: Continually working with professional advisors, including lawyers and financial experts, will help to ensure a successful transaction and avoid potential legal and financial difficulties.