As Saudi Arabia opens up to more international investment, the property sector has assumed growing importance, along with related industries such as construction and the supply of building materials. With the real estate market expanding, it is important for overseas investors in particular to understand their rights and responsibilities under Saudi law.
The Real Estate Ownership Law allows non-Saudis to own a property for the purpose of private residence in the Kingdom, subject to approval from the Ministry of Interior.
Individuals, companies and international bodies with a license to operate in the Kingdom may own or rent property for their corporate headquarters, private homes or workers’ accommodation, although of course they must obtain authorization from the Ministry of Foreign Affairs.
Non-Saudis may also own property or land in the Kingdom for investment purposes; the total value of the project must be at least SR30 million, although this amount is subject to adjustment by the Council of Ministers, depending on circumstances.
An important change attributable to the new openness in the Saudi property sector relates to Makkah and Madinah. Before, non-Saudis were not permitted to own real estate in the two holy cities; they were allowed only to rent, and for a maximum period of six years — a two-year lease, renewable no more than twice.
Now, coinciding with the launch of the new Premium Residency, the Ministry of Justice and the Ministry of Commerce and Investment have established new regulations for Premium Residency holders to own leasehold property in Makkah and Madinah, for a maximum lease period of 99 years.
In general, the regulations in the Kingdom clarify the terms of property ownership and investment for non-Saudis, along with the permits and documents that must be submitted to complete transactions.
Saudi property transfer regulations have also ensured that these transactions, for both Saudis and non-Saudis, take place in a modern and technologically advanced way, thus saving time without sacrificing quality or efficiency.
The property market throughout the Gulf states is an active one; with the establishment of the Real Estate General Authority there should be a further renaissance, with an emphasis on the importance of laws to regulate this market and ensure the safety and fairness of its procedures.
• Dimah Talal Alsharif is a Saudi legal consultant, head of the health law department at the law firm of Majed Garoub and a member of the International Association of Lawyers. Twitter: @dimah_alsharif
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