Transfer of Property Act at Saudi Arabia

28 Apr 2025 --
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In Saudi Arabia, the Transfer of Property Act from India does not apply. Saudi Arabia operates under a unique legal system based primarily on Islamic law (Sharia), with certain civil laws developed in line with modern governance.

Key Features of Property Transfer in Saudi Arabia:

1. Legal Framework:

The property transfer process in Saudi Arabia is governed by Sharia Law, specifically focusing on contracts and property ownership.

Saudi Civil Code is also in development, but much of the property law remains rooted in Islamic principles, with the guidance of the Saudi Real Estate Law and Commercial Law.

2. Ownership Rights:

Saudi nationals enjoy full rights to own property, while foreigners face restrictions:

Foreigners can buy property in specific areas (such as investment zones) but generally cannot own land.

Foreign ownership of real estate is usually restricted to commercial leases, particularly in areas for business or investment. In most cases, foreigners need to form joint ventures with a Saudi national for land acquisition.

3. Property Transfer Process:

Notary/Legal Documentation: All property transfers must be formalized through a notary or legal representative to ensure the transaction complies with Saudi law.

Title Deed: Property must be transferred officially via a title deed (known as "Sakl" or "Mulk"), which must be registered in the Saudi Land Registry.

4. Foreigners' Property Restrictions:

Foreigners are generally not allowed to own land outside certain zones, including some commercial or residential properties. In certain cases, non-Saudis may lease property for up to 99 years.

Foreigners investing in Saudi Arabia might be able to purchase property through special investment programs, particularly in economic zones.

5. Mortgages and Financing:

Mortgage laws exist but are regulated by Islamic finance principles. Mortgages are structured in a way that they comply with Sharia, meaning interest-based lending is not permissible. Instead, Islamic financing models like Murabaha (cost-plus financing) and Ijara (leasing) are used.

6. Inheritance Law:

Property inheritance follows Sharia law, which divides assets among heirs in specific shares, depending on the family relationship (husband, wife, children, etc.). In certain cases, property transfer can be a subject of dispute due to Sharia-based inheritance laws.

7. Registration Process:

All property transfers must be registered with the Saudi Land Registry to ensure legitimacy. This helps resolve any future disputes about ownership.