Landmark legislation enacted in 2026 regarding the sale of real estate overturns the past 99-year leasehold arrangement to provide actual freehold title deeds to eligible Muslim purchasers within specified holy city regions, thus doing away with a ban preventing Muslims from purchasing property around Islam’s holiest places.
RIYADH: Property ownership has been restricted by Saudi Arabia for a considerable period of time. Recently, there is a new real estate law that came into force in 2026. It allows foreign Muslims (except for those who are Saudis) to own property in Makkah and Madinah – not temporary leases, like the former law, but freehold title deeds in particular zones. According to the Real Estate Law 2025, which replaced the Real Estate Law 2000, foreigners and non-Saudi Muslims can have the right to own and use property in Makkah and Madinah under some conditions.
Change that occurred – Leasehold vs. Freehold
For an understanding of how significant the change is, one needs to consider some historical facts. Traditionally, no non-Saudi Muslim was allowed to have a freehold title deed on property in the cities of Makkah and Madinah; rather, they could only have complicated 99-year usufruct leases. With the introduction of regulations in 2026, there is a huge change occurring.
The difference between leasehold and freehold is of great importance. While a 99-year usufruct provides the user with the privilege to use and enjoy the land in question without giving any ownership, it can neither be put on mortgage in a conventional sense, nor is it transferable, and above all, it eventually expires. However, the new legislation provides Muslim consumers with actual ownership, which allows financing, wealth creation, and inheritance within the vicinity of two holiest cities of Islam.
- Muslim non-Saudi individuals: May own property in designated zones within Makkah and Madinah — both residents and non-residents of Saudi Arabia. Cannot own outside designated zones.
- Saudi-listed companies: May own and benefit from property rights across Makkah and Madinah, subject to Capital Market Authority regulations.
- Licensed investment funds and SPVs: Permitted to own property in the holy cities under CMA-regulated conditions.
- Non-Muslims: Remain completely prohibited from owning property in Makkah and Madinah regardless of residency status or investment vehicle.
- Outside designated zones: Foreign Muslim individuals cannot purchase property outside the holy cities’ designated zones, even if Muslim.
Applications for the Saudi Properties digital portal will be open
The Real Estate General Authority (REGA) of Saudi Arabia has developed the Saudi Properties digital portal, which will regulate the new Makkah Madinah ownership structure of properties, whereby those who qualify can file requests through the system, have their eligibility assessed, and get their approvals. This portal also imposes a disposal charge of up to 5 percent of the price of the property upon sale, while failure to abide by the rules attracts penalties worth up to SAR 10 million.
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Beyond Vision 2030 economics
The Saudi government looks at the property ownership reform in the Makkah Madinah area within the context of Vision 2030’s economic diversification plan, but the importance of such an initiative goes far beyond the economic aspects associated with real estate investment returns.
This policy means something much more important to hundreds of millions of Muslims around the world who for years have longed for owning properties near the Haramain. The change from short-term leasehold to long-term freehold title signifies a change in the way Muslims relate to the most holy places in their religion.
What the old law prohibited
| Ownership type | Before 2026 | From 2026 |
|---|---|---|
| Muslim non-Saudi individuals | 99-year usufruct only | Freehold within designated zones |
| Non-Muslim foreigners | Prohibited | Still prohibited |
| Listed Saudi companies | Restricted | Permitted under CMA rules |
| Freehold title deeds | Saudi nationals only | Extended to Muslim non-Saudis |
What this means for the worldwide Muslim investors community
The property ownership Makkah Madinah Muslims model will focus on an untapped market having massive potential. The government of Saudi Arabia plans to attract more than 30 million Umrah pilgrims each year by 2030 with huge infrastructure and transportation and hospitality facilities being created in both cities.
The capability to own freehold properties close to the Masjid al-Haram and Masjid an-Nabawi for the Muslim investors around the world, especially for those coming from Pakistan, Indonesia, Malaysia, Turkey and other Gulf countries, will mean something religious and financial at the same time. The land adjoining both Harams is by default limited and freehold ownership of this land now exists legally for the first time ever.
Nayab Fatima is a university graduate and an emerging media professional with a strong passion for journalism, research, and independent reporting. She specializes in developing well-researched, fact-based, and analytical news stories covering a wide range of sectors, with particular expertise in technology, telecommunications, aviation, and the automobile industry.
