Buying Property in Saudi Arabia – what foreigners really need to know about Medina and Makkah

Many people talk about property in Saudi Arabia as if it has all become very simple by now. Open a portal, pick an apartment, pay, done. In reality, of course, it is not quite that straightforward. Especially not when it comes to Medina or Makkah.

That is where things get interesting. And not only emotionally, because many Muslims naturally feel a special connection to these cities, but also legally. Anyone looking at property in Riyadh or Jeddah is operating in a different world from someone focusing on Medina or Makkah. The holy cities do not follow the same rules.

Since the new law, the market for foreigners is clearer in structure. But "clearer" does not automatically mean "easy". You need to understand where you are allowed to buy, what you are actually buying, and whether you personally are eligible at all. That is usually where the misunderstandings begin.

What has changed under the new system?

Saudi Arabia has restructured property purchases for non-Saudis. In the past, much was tighter, less transparent or practically hard to grasp. Now the topic runs in a much more structured way — above all through official zones and digital processes.

The basic principle is actually easy to understand:
The state does not simply say across the board "foreigners may buy", but defines:

• in which areas a purchase is permitted,
• which type of rights is possible there,
• and for whom the whole thing applies at all.

For this there is the official Saudi Properties Portal from REGA. That is exactly where it should ultimately be checked whether a property is purchasable for the respective buyer at all.

The first big misconception: Makkah and Medina are not a normal property market

This needs to be separated clearly from the start.

Many hear: Saudi Arabia has opened its property market to foreigners.
And then automatically think: Great, so I can simply buy in Medina or Makkah too.

And one more point is important:
The general logic that a foreigner legally living in Saudi Arabia can acquire a self-occupied residential property somewhere cannot simply be transferred to Makkah and Medina.

That matters because this is exactly where many start drawing the wrong conclusions.

Freehold or leasehold – what are you actually buying?

These are two terms that are constantly used. Many just nod along even though they do not know exactly what is meant.

In Saudi Arabia, leasehold in practice usually means a right of use for 99 years. That is not “forever”, but for many buyers it can feel almost like ownership. You should still always verify the exact term in the contract and the register.

In the Saudi context, legal work often uses terms such as usufruct. For everyday purposes, however, you can remember it like this:
You receive a strong right of use, but not necessarily full ownership.

And now comes the point that matters for Makkah and Medina:

You should not automatically assume there that everything is freehold. In practice, you should rather expect at first that a unit may also be structured as a long-term right of use. At the same time, it would be equally wrong to classify everything across the board as leasehold only.

The zones – why you should not do anything without this check

REGA works with official zones. These zones decide what is possible and what is not. Which areas exist and what is generally permitted there can be seen in the official zones section of Saudi Properties — not on an agent's website and not in a listing.

For a rough orientation, official zone names and maps such as those from Saudi Properties / REGA help. The maps below show the numbered zones in Makkah and Medina with a legend — for orientation, not a cadastral map. They do not replace an official check, but they help you understand why not every location follows the same rules.

For orientation, names like these keep appearing in public:

Whether a specific project in one of these zones is actually permitted for you as a buyer is not checked via this list, but directly in the official REGA zones portal — for the exact unit, with your buyer status.

Because the decisive point is:
These lists never replace checking the specific unit in the official system.

A project can sound good. The location can be attractive. The marketing can look perfect. And still, in the end it must be checked whether exactly this apartment or exactly this unit in this zone is permitted for exactly this buyer status.

In Makkah and Medina this is not a side detail, but the core of the matter.

Visitor ID and digital identity – why many get stuck here already

This is one of the points that many completely underestimate at the start.

If you already live in Saudi Arabia and have an Iqama, much is easier. The Iqama is the official residence permit for foreigners in the Kingdom. Anyone who has it is already properly recorded in the system.

If you do not live in Saudi Arabia, however, things look different. Then you need a different form of official identification. And that is exactly where digital identity and Visitor ID come into play.

The Visitor ID is, in simplified terms, an official visitor ID card. It matters because it can now also be relevant when it comes to bank accounts and payment processing. And that is decisive for a property purchase. Because even if you were theoretically allowed to buy, it helps little if you cannot get cleanly through identity and payment processes in practice.

How do you obtain this digital identity?

In very simplified terms, the path for non-residents runs like this:

Put simply:
Before you can seriously buy, you first need to be digitally ready to buy.

The actual purchase process – step by step

If you break it all down, the purchase usually runs roughly like this:

That sounds simple on paper. In practice, a lot depends on how thoroughly the groundwork was done.

The register – why it matters so much today

In the past, many thought mainly about contracts and deeds when buying property. Today the official property register is much more important.

The register essentially shows:

• who owns the property,
• which rights apply to it,
• whether encumbrances exist,
• and whether everything is properly documented.

For you as a buyer that means:
A property with a clean register status is much more trustworthy than a property where only nice documents are presented but the actual registration is unclear.

In a market like Saudi Arabia you should not be casual about that.

Taxes and fees – what you really need to budget for when buying

When buying property in Saudi Arabia, many look only at the purchase price at first. That is understandable, but not enough. The most important standard cost beside that is the real estate transaction tax, i.e. RETT. According to ZATCA, this is generally 5% of the value of the property. The authority describes it as a general tax on the sale or transfer of ownership of a property – not as a special rule for residents only. What matters first and foremost is the transaction itself, not whether the buyer lives in the country or not.

Important, however: that does not mean residents and non-residents are otherwise treated completely the same. In the actual purchase process there are of course differences – for example with Iqama, Visitor ID, digital identity, bank account and the question of whether you are permitted for the specific property at all. RETT should be viewed separately from that. It is the general tax on the property transaction itself.

In addition to RETT, further costs may arise in individual cases, for example for:

• register procedures
• powers of attorney
• translations and certifications
• agents
• bank processing
• ongoing service charges in the project
• ongoing operating costs

That is exactly why when buying you should not only ask: "What does the apartment cost?", but always also: "What does the whole transaction really cost me in the end?"

Especially with larger projects in Makkah and Medina you should not calculate as if it were only "apartment price plus done". In many cases there are further ongoing costs attached.

What do foreigners typically buy there?

In Makkah and Medina, foreign buyers usually focus more on:

• apartments
• serviced apartments
• units in larger development projects
• pilgrimage-related or hospitality-related property

Classic detached family homes, as you might expect in other markets, are less typical.

That also fits the structure of the holy cities: there the focus is more on dense development, large projects and sometimes very location-specific models.

Purchase via a company – often the stronger structure, but not without risk

Buying property via a company is generally possible in Saudi Arabia and for many investors is even a much stronger route than a pure private purchase. The system is not designed only for individuals, but also for companies. Especially when a property is not only to be held privately but rented out, used operationally, further developed or deployed as part of a larger wealth-building strategy, the company structure is often the cleaner and more professional solution.

The big advantage is obvious: the property then runs not in your private name, but directly through the company. That can make much more sense fiscally, operationally and strategically, especially if further properties, investors, rental models or business activities are added later. Anyone thinking seriously about property in Saudi Arabia therefore often thinks structurally first, not privately.

Especially for Makkah and Medina, the company structure is particularly interesting for many because private purchase there is much more restricted. Still, here too: a company is not a free pass. In the end, the specific zone, the specific type of rights and the specific property always decide.

In addition, it is publicly confirmed that for the holy cities there is also the indirect investment route via listed Saudi companies with a property connection. In the relevant cases, a 49% limit applies there for non-Saudi participation. That shows exactly how important the right structure is in Makkah and Medina.

Can you also invest indirectly?

Yes, and for some that is even more sensible — especially when a direct private purchase in Makkah or Medina is not an option anyway.

Not everyone has to or wants to buy an apartment directly. There are also indirect routes, for example via:

• listed Saudi companies with a property connection
• funds
• investment structures with a property connection

That is of course something different from a direct private or company purchase. Especially in the holy cities, the participation limit for non-Saudis often plays a role. For investors who want to deploy capital rather than use the property themselves, however, this route can be quite interesting.

Where the biggest risks lie

Honestly, the biggest risk is usually not the price.

The biggest risk is believing a property is purchasable and suitable even though exactly this structure does not work cleanly for exactly this buyer.

The most common problems arise here:

• the zone was not checked properly
• freehold and leasehold were confused
• the identity side was not prepared
• the register was not checked seriously enough
• the seller was trusted more than the official system
• property ownership is confused with the right of residence

What you should really check before buying

In practical terms I would always tick off these points beforehand:

If you are unsure about any of these points, that is not a small problem. Then you are not yet at the point where you should sign.

For whom are Makkah and Medina really interesting as purchase locations?

For Muslims with a genuine connection to the holy cities, a purchase there can be emotionally and strategically very compelling. But this is not a market for people who simply look romantically at a listing.

It is especially interesting for people who:

• really want to understand the rules,
• calculate not only emotionally but also soberly,
• proceed in a structured way,
• and are willing to engage with zones, register, identity and types of rights.

Anyone who simply wants "an apartment in Medina" without understanding the logic behind it will quickly notice that it is more complicated than they thought.

Conclusion

Buying property in Saudi Arabia is clearer today than it used to be. But Makkah and Medina remain a special case. There it is not enough to see only a nice project and be inspired by the location.

You need to understand:

• where the property is located,
• what you legally receive there,
• who is allowed to buy at all,
• how you become technically and practically ready to buy.

If that is properly prepared, Makkah and Medina can be very interesting. If not, a supposedly beautiful opportunity quickly becomes an unnecessarily complicated case.

In the end it is simple:
Not the nicest marketing decides, but zone, register, type of rights and buyer status.

Key terms explained simply