Freehold or Leasehold? Understanding Saudi Property Rights as a Non-Resident Buyer

British and international buyers usually know the difference between freehold and leasehold from home. Saudi Arabia has its own versions of these concepts, and under the 2026 ownership law the difference matters enormously, especially in Makkah and Madinah. This guide maps the familiar terms onto the Saudi system so you know exactly what a listing is offering.

The UK picture, briefly

In England and Wales, freehold means you own the property and the land indefinitely. Leasehold means you own the right to occupy for a fixed term, commonly 99 to 125 years on flats, usually with ground rent and service charges, and the value of the lease erodes as the term shortens. Every UK buyer learns to ask: how long is left on the lease?

The Saudi equivalents

Saudi law recognises a spectrum of real estate rights, and the 2026 Law of Real Estate Ownership by Non-Saudis allows foreigners to acquire several of them within the designated zones:

• Full ownership (raqaba). The closest equivalent to UK freehold: permanent, registered title to the property, recorded through the Real Estate Registry. This is what the new law makes available to eligible buyers in designated zones, including, for Muslim buyers, zones in Makkah and Madinah.
• Usufruct (manfa’a). The right to use and benefit from a property for a defined term, comparable in feel to a long leasehold. Terms have historically run up to 99 years, and the authorities may set maximum durations per zone. The underlying title stays with the owner; your right expires at the end of the term.
• Long-term leases and other rights. The law also contemplates leaseholds, easements and similar lesser interests, each registrable and each with its own term and conditions.

Why this matters so much in Makkah and Madinah

Before the 2026 law, non-Saudis generally could not hold title in the Holy Cities at all. The market that grew up around the Haram was therefore built on lease and usufruct products: hotel-residence schemes and long-term occupancy rights, often marketed abroad with terms of a few decades. Those products still exist, and some remain on sale.

The change is that Muslim buyers, resident or overseas, can now hold freehold title within the officially designated zones of both cities, applied for through the Saudi Properties portal. That puts two very different products side by side in the same market:

• A freehold apartment in a designated zone, with permanent registered title that can pass to your heirs.
• A usufruct or lease-based unit, which may look similar and cost less, but which ends, with the value declining as the term runs down, exactly like a short UK lease.

Neither is automatically wrong. A 30-year usufruct at the right price may suit a buyer who wants decades of Ramadans near the Haram without a legacy ambition. But the two should never be priced or compared as if they were the same thing.

Questions to ask about any Saudi listing

• Which right is being sold? Freehold title (raqaba), usufruct (manfa’a), or a lease? The brochure word “ownership” is used loosely; the contract and the registry entry are what count.
• If it is a term right, how long is left? And what, if anything, happens at expiry: renewal terms, reversion, compensation.
• Is the property inside a designated zone? Foreign freehold only exists inside the approved geographic scope; verify the specific plot on the Saudi Properties portal.
• What are the ongoing charges? Service and community fees vary widely by development, much like UK service charges.
• Will the right be registered in your name? Completion happens at the Real Estate Registry; an unregistered arrangement is a red flag.

The rules that frame all of this

Ownership by non-Saudis applies only within zones approved by the Council of Ministers, and the authorities may set the maximum foreign ownership share and the maximum usufruct duration per zone. In Makkah and Madinah, individual ownership of any kind is reserved for Muslims. Resident foreigners may additionally own one residential property outside the zones for personal use. Applications, whether for freehold or lesser rights, run through REGA’s Saudi Properties portal, and the fees described in our costs guide apply.

Weighing a freehold against a usufruct offer? Register your interest and you will hear as verified freehold opportunities in the designated zones go live.