Buying Property in Saudi Arabia

The real estate sector is going on a rapid uphill these days throughout the world thanks to the growing community of investors who are willing to go any length to reap benefits from their investments. Buying property for the purpose of living, renting, or reselling has become a very common occurrence these days and people are investing their money in countries other than their own too.

Saudi Arabia is considered a rich land though a conservative one too, as most expats would have experienced. When it comes to buying property in Saudi Arabia, foreigners may be in for a very difficult time. Expatriates were not allowed to buy property in Saudi Arabia till some time back. Although this rule has seen a bit of relaxation, the basic problem remains with most contracts being enacted for a very short time span due to which there is very little scope  for returns of any sort.

One of the major problems which foreigners face while trying to buy property in Saudi Arabia is the prohibitive cost involved in the deal. Moreover, the purchaser should also get prior permission from the licensing authority of the country to buy residential property in their names.

The same rule also applies to investing in private land for the purpose of construction too by foreign nationals. They need to secure permission from the concerned licensing authority before getting the legal nod for their projects. One important criterion in this regard is that these projects must have a value that exceeds SAR 30 Million for it to be sanctioned.

The process of purchasing property in Saudi Arabia is as follows. Once the buyer has identified the property that he wants to buy, he approaches the seller through the agent/lawyer and starts negotiating the price. If an agreement is reached in this regard, the purchaser needs to approach the local Sharia court as per the law of the land, to make sure that the property that he intends to purchase has valid title deeds. It is the Sharia court which records transfer of the title deed from the seller to the buyer. The property comes to be in the name of the buyer only after the court stamps the legal document related to the transfer of ownership.

A most important factor to be remembered in this regard is that Saudi Arabia does not open its doors to the holy cities of Mecca and Medina. Foreigners cannot own property in these cities except through inheritance. But it is possible for foreign Muslims to secure leases for a period of two years and to get them renewed for another two more year’s time.