Expropriation of Real Estate for Public Interest and Temporary Taking of Possession Enters into Force

The “Expropriation of Real Estate for Public Interest and Temporary Taking of Possession of Real Estate” Law entered into force on Saturday, 28 Rajab 1447 AH, corresponding to January 17, 2026, following the lapse of 120 days from the date of its publication in the Official Gazette. This law represents a new phase in regulating and unifying the procedures for real estate expropriation and temporary taking of possession, and in developing them in a simplified and transparent manner.

The law aims to ensure fair compensation for property owners and project-owning entities, while enhancing the principles of transparency and governance through the unification of regulatory reference and oversight under the General Authority for State Real Estate.

Procedures Ensuring Rights and Achieving Fairness

The law includes a set of procedures that safeguard the rights of property owners and project-owning entities. It stipulates that expropriated properties shall be valued by appraisers accredited by the Saudi Authority for Accredited Valuers, in accordance with fair market value.

The law also provides for the addition of 20% to the property value as compensation for expropriation, in addition to granting compensation for temporary taking of possession equivalent to fair rent plus an additional 20%.

Exemptions Related to the Law

The exemptions related to the law have come into effect, including exempting owners of expropriated properties from real estate transaction tax for a period of five years, in an amount equal to the tax value of the compensation amount or less when purchasing replacement properties. The exemption period begins from the date of receipt of the compensation amount.

The law also includes exemption from white land fees in the event that compensation is provided in the form of alternative land.

Conditions Prior to Commencing Expropriation Procedures

Before commencing expropriation procedures, the new law requires searching State-owned real estate for alternatives that fulfill the purposes of the project serving the public interest. If no such alternatives are available, it must be ensured that the necessary financial appropriations are secured before initiating the procedures.

This regulatory framework contributes to enhancing spending efficiency and supporting sustainable development across various regions of the Kingdom.

Source: General Authority for State Real Estate