Regulatory Watch — Ownership Laws, Visa Programs, and Policy Changes Affecting Mukaab Buyers

Regulatory Watch: Policy Developments Affecting Mukaab Residential Buyers

The regulatory environment governing residential real estate in Saudi Arabia is evolving more rapidly than at any point in the Kingdom’s modern history. Several recent and anticipated policy changes directly affect buyers and investors at The Mukaab and New Murabba — opening new opportunities for international purchasers while introducing constraints that require careful navigation. This page tracks the most significant regulatory developments and their implications for residential purchase and investment decisions.

Foreign Ownership Law (Effective January 2026): The Game Changer

The Law of Real Estate Ownership by Non-Saudis represents the single most significant regulatory change affecting The Mukaab’s addressable buyer pool. Effective from January 2026, this law opens designated investment zones across Saudi Arabia to foreign freehold ownership — a fundamental shift from the historical restriction that limited property ownership to Saudi nationals and GCC citizens.

What the Law Enables: The law permits direct property ownership by non-Saudi natural persons (individuals), Premium Residency Visa holders (requiring SAR 4 million minimum investment), corporate entities registered in Saudi Arabia, diplomatic missions and accredited personnel, international organizations with Saudi offices, and other categories as designated by the Ministry of Investment.

Designated Investment Zones: The law operates through designated investment zones — specific geographic areas within Saudi cities where foreign ownership is permitted. As of Q1 2026, the zone designations are being refined and published progressively. New Murabba is expected to be within designated zones based on its positioning as a flagship development under Vision 2030 and PIF ownership. Diriyah Gate, KAFD, and other giga-project areas are similarly expected to receive designated zone status. Buyers should verify the specific zone status of any property before committing to purchase.

Registration Requirements: Foreign buyers must register property ownership through the Saudi General Authority for Real Estate (REGA) and comply with registration, documentation, and verification requirements. The practical efficiency of this registration process — processing times, documentation requirements, and potential bureaucratic friction — will significantly affect international buyer experience in the market’s early years. Early adopters may encounter administrative processes that are still being refined.

Historical Context: Saudi Arabia has historically been one of the most restrictive markets for foreign property ownership in the world. The opening to foreign freehold ownership represents a structural change comparable to Dubai’s freehold reforms in 2002, which transformed Dubai from a relatively small Gulf port city into the world’s most active international luxury real estate market. Dubai’s experience suggests that Saudi Arabia’s foreign ownership reform could, over time, significantly expand the buyer pool for premium developments like New Murabba — though market maturity and buyer confidence take years to develop.

Implications for New Murabba: The foreign ownership law expands The Mukaab’s addressable buyer pool from Saudi nationals and GCC citizens (a relatively small pool of ultra-high-net-worth individuals) to include wealthy individuals from across the globe — European, Asian, American, and African buyers who may seek to own premium property in one of the world’s fastest-growing cities. This expansion of the buyer pool directly supports the market absorption case for New Murabba’s 90,000 units, though the timeline for international demand to materialize at scale is measured in years rather than months.

See our foreign ownership guide for comprehensive analysis of the law’s implementation details and practical implications for buyers.

Five-Year Rent Freeze (September 2025): Investor Impact

In September 2025, the Saudi government imposed a five-year rent freeze in response to affordability concerns driven by rapid price appreciation across Riyadh’s residential market. This policy — one of the most significant regulatory interventions in Saudi real estate history — directly affects the investment case for buy-to-let purchasers at New Murabba.

What the Freeze Means: The rent freeze prevents landlords from increasing rents on existing leases for a period of five years from September 2025. New leases for newly delivered units may be priced at market rates, but once a lease is signed, the rent cannot be increased during the freeze period. This distinction is important for New Murabba investors: units delivered during the freeze period can be initially leased at market rates, but rental income will be frozen at that rate for up to five years regardless of market appreciation.

Policy Context: The rent freeze was triggered by rapid rental appreciation in Riyadh — some neighborhoods experienced 30 to 50 percent rental increases during 2023-2025 as population growth from corporate relocations, government employment expansion, and natural growth outpaced housing supply. The government, balancing the interests of Vision 2030’s premium development agenda with social stability concerns, chose to intervene on behalf of tenants while continuing to encourage new development through favorable planning and ownership policies.

Impact on Investment Returns: For buy-to-let investors at New Murabba, the rent freeze constrains the rental income growth component of total returns during the freeze period. However, several mitigating factors apply. First, Riyadh’s current rental yields of 8.89 percent already lead the Gulf region, providing a strong base yield even without growth. Second, capital appreciation — driven by the foreign ownership law, population growth, and district maturation — continues to accrue regardless of the rent freeze. Third, the freeze applies to rental increases, not to initial rental pricing — new units entering the market can be priced at current market rates, which have already appreciated significantly. Fourth, the five-year freeze period (ending September 2030) would expire before or shortly after New Murabba’s Phase 1 delivery, potentially freeing rent growth just as the district achieves initial critical mass.

Comparable Policies: Rent control and rent freeze mechanisms exist in numerous global cities — Berlin, New York, San Francisco, Paris, and others — and their long-term effects on market dynamics are well-studied. The general finding is that rent controls suppress rental investment sentiment in the short term but do not prevent long-term capital appreciation in markets with strong demand fundamentals. Riyadh’s demand fundamentals — population growth, economic diversification, international demand opening — are among the strongest globally, suggesting that the rent freeze represents a near-term headwind within a structurally positive market.

Premium Residency Visa Program: The Legal Framework for International Buyers

The Premium Residency Visa program provides the legal residency framework that complements the foreign ownership law for international Mukaab buyers. The program creates a pathway for wealthy foreigners to not only own property in Saudi Arabia but to live, work, and build business operations within the Kingdom.

Requirements: The Premium Residency Visa requires a minimum investment of SAR 4 million (approximately $1.07 million). The investment can take the form of property purchase, business investment, deposit in Saudi financial institutions, or a combination of qualifying investments. A property purchase at New Murabba — where estimated starting prices of SAR 8,500 per square meter for a two-bedroom apartment of approximately 150 square meters would price at approximately SAR 1.275 million — would not independently satisfy the SAR 4 million threshold. Buyers would need to combine a property purchase with additional qualifying investments to meet the visa requirement.

Benefits: Premium Residency Visa holders receive long-term residency rights (renewable indefinitely), property ownership rights in designated zones, business ownership and operation rights, family sponsorship (spouse and dependents), access to healthcare and education systems, and eligibility for Saudi financial products including mortgages. For international buyers considering New Murabba as a primary or secondary residence, the visa program provides the legal foundation for residency without requiring employer sponsorship — a significant departure from the traditional kafala (sponsorship) system that historically governed foreign residency in Saudi Arabia.

Comparison with Dubai: Dubai’s Golden Visa program — requiring AED 2 million (approximately SAR 2 million) minimum property investment for a 10-year residence visa — provides a useful benchmark. Dubai’s program has been credited with significantly boosting international property demand, particularly from Indian, Russian, European, and Chinese buyers. Saudi Arabia’s Premium Residency Visa, with its higher investment threshold (SAR 4 million versus SAR 2 million for Dubai) and more recent launch, is likely to attract a more select pool of higher-net-worth individuals — a buyer profile aligned with New Murabba’s ultra-premium positioning.

Real Estate Transaction Tax and VAT

Saudi Arabia levies two taxes on real estate transactions that affect New Murabba buyers:

Real Estate Transaction Tax (RETT): A 5 percent tax on the property purchase price, paid by the buyer at the time of registration. For a New Murabba apartment with an estimated price of SAR 1.275 million (150 sqm at SAR 8,500/sqm), the RETT would be approximately SAR 63,750 ($17,000). For a penthouse at SAR 5 million, the tax would be SAR 250,000 ($67,000). This transaction cost must be factored into total acquisition cost calculations.

Value Added Tax (VAT): Saudi Arabia’s VAT rate of 15 percent applies to the first sale of new residential property by a developer. However, the Saudi government provides VAT exemptions for first-time home purchases by Saudi citizens up to certain thresholds, and the VAT treatment of sales to foreign buyers under the new ownership law may be subject to specific guidance. Buyers should obtain professional tax advice on the VAT treatment of their specific transaction.

No Capital Gains Tax: Saudi Arabia currently imposes no capital gains tax on real estate disposals. This tax advantage — particularly compared with jurisdictions like the UK (up to 28 percent CGT), the US (up to 20 percent long-term CGT), or Australia (up to 45 percent marginal rate including CGT) — significantly enhances the after-tax investment return for international buyers. However, buyers resident in jurisdictions with worldwide taxation (such as the US) may owe domestic capital gains tax on Saudi property appreciation regardless of Saudi tax policy.

No Personal Income Tax: Saudi Arabia imposes no personal income tax. For residents who relocate to Saudi Arabia under the Premium Residency Visa, this provides a significant tax advantage on employment income, investment income, and business profits compared with most developed economies. This tax environment contributes to the attractiveness of Saudi Arabia — and by extension, New Murabba — as a destination for globally mobile wealthy individuals.

Mortgage and Financing Regulations

Saudi Arabia’s mortgage market has undergone significant development in recent years, with implications for New Murabba buyers:

Saudi Real Estate Refinance Company (SRC): Established by PIF to develop the Saudi mortgage market, SRC provides liquidity to mortgage lenders through securitization. The growing mortgage market makes property purchases more accessible to Saudi buyers who may not have full purchase prices in cash.

Loan-to-Value Ratios: Current regulations permit loan-to-value ratios up to 90 percent for first-time buyers of their primary residence, with lower LTVs for second homes and investment properties. For New Murabba’s premium pricing, mortgage availability enables a broader buyer pool than cash-only purchases would permit.

Foreign Buyer Mortgage Access: The availability of mortgage financing for foreign buyers under the new ownership law is an evolving area. Initial indications suggest that Saudi banks will offer mortgage products to Premium Residency Visa holders, though terms, rates, and eligibility criteria may be more restrictive than for Saudi nationals. Buyers should explore financing options with Saudi banks early in their purchase evaluation process.

Anticipated Regulatory Developments

Based on regulatory trends and policy signals, several additional regulatory developments may affect New Murabba buyers during the project’s development timeline:

Strata Title Law Refinement: As Saudi Arabia develops its first large-scale apartment and condominium markets, the legal framework for strata title ownership (individual ownership of units within shared buildings) will require further development. Issues including common area management, service charges, owners’ associations, and dispute resolution will need clear legal frameworks that are currently being developed.

Sustainability Regulations: Saudi Arabia’s commitment to net zero by 2060 is likely to generate building performance regulations — energy efficiency standards, water efficiency requirements, waste management mandates — that affect new developments. New Murabba’s sustainability targets position the development ahead of anticipated regulations, providing regulatory compliance assurance to buyers.

Tourism and Short-Term Rental Regulations: As Riyadh develops its tourism sector toward the 100-million-visitor target, regulations governing short-term rentals (Airbnb-style accommodation) within residential developments may be introduced. These regulations could affect the rental strategy of New Murabba investors who target short-term tourism rental rather than long-term residential leasing.

For investment analysis incorporating regulatory factors, see our Investment section. For PIF strategy context, see our sovereign wealth fund analysis. For market absorption implications of regulatory changes, see our demand modeling.