Saudi Arabia Land Rights

Gov't - property taxes: No property taxes are currently levied in Saudi Arabia.

Saudi Arabia Forms of Ownership

Only citizens and, in certain limited circumstances, nationals of other GCC states are allowed to own real property Only citizens and other GCC nationals may engage in commercial trading activities. Saudi entity having non-Saudi shareholders which is duly licensed under Foriegn Capital Investment Code is allowed to own real property for corporate purposes subject to approval by the Ministry of Interior.

Saudi Arabia Real Estate Info Summary

Matters pertaining to disposition of a deceased’s property are subject to Shari’ah and largely administered and adjudicated by Shari’ah courts. Muslims may make a will devising property to a nondesignated heir as long the will does not dispose of more than one-thirds of the estate. At least two-thirds of a Muslim decendant’s estate must be distributed between designated heirs in specified percentages in accordance with Shari’ah. A non-Muslim is not considered a designated heir of a Muslim. Wills should be in writing and witnessed in accordance with Shari’ah requirements. Under Shari’ah, a designated heir cannot be disinherited.

Ownership of real property is evidenced by title deeds. Real property records are kept manually and administered by designated notaries public who also register ownership and record transfer of real property and real property mortgages.

Principles of contract in Saudi Arabia derive from Shari’ah and are not codified in any statute or civil code. Quran contains numerous references to commercial contracting principles; according to Quran, God has specifically commanded Muslims to honor their contracts. Under Shari’ah there is considerable freedom to contract so long as purposes of contract are lawful. In Saudi Arabia speculation and unproductive gain or interest is prohibited and thus contracts having either of these as elements would be unenforceable. Written contracts are preferred but oral contracts, if properly witnessed or proved, are enforceable. Contracts with minors or incompetents are void. Only proven direct damages are awarded for breach of contract. Damages for lost opportunities or lost profits are considered speculative and would not be awarded. It would be unusual for Saudi court or tribunal to fashion injunctive relief or remedies.

Property Taxes:

At present there are no property taxes levied in Saudi Arabia.

Saudi Arabia Mortgages & Financing

Principles of contract in Saudi Arabia derive from Shari’ah and are not codified in any statute or civil code. Quran contains numerous references to commercial contracting principles; according to Quran, God has specifically commanded Muslims to honor their contracts. Under Shari’ah there is considerable freedom to contract so long as purposes of contract are lawful. In Saudi Arabia speculation and unproductive gain or interest is prohibited and thus contracts having either of these as elements would be unenforceable. Written contracts are preferred but oral contracts, if properly witnessed or proved, are enforceable. Contracts with minors or incompetents are void. Only proven direct damages are awarded for breach of contract. Damages for lost opportunities or lost profits are considered speculative and would not be awarded. It would be unusual for Saudi court or tribunal to fashion injunctive relief or remedies.

Under Shari’ah mortgage, pledge or lien on movable property is valid only if such property is delivered into possession of pledgee. Mortgages, pledges or liens on movable property are usually not enforceable as security devices in absence of such possession.

Real property mortgages are permitted under Shari’ah and in practice the Notary Public registers and records such mortgages both in the registry kept for the purpose and by means of notation on title deed evidencing ownership of real property.

At the present time, however, Notaries Public will not register or record mortgages in respect of real property where commercial banks are, or are suspected by Notary Public to be involved , on grounds that such involvement implies that interest is a feature of the transaction.