Expropriation Law Saudi Arabia: Market Value Plus 20%

The expropriation law Saudi Arabia brought into force on 17 January 2026 pays market value, an indemnity of 20% of that value, and damages caused by the procedure (Umm Al-Qura, Article 6(1)). Temporary possession pays not less than comparable rent, plus 20% of that rent. None of it is retroactive, and the test for who is owed the 20% is the one most summaries get wrong: the repealed 2003 law, which carried no uplift at all, still governs every file whose start decision was issued before 17 January 2026. Six days into the new regime, the gazette printed one of those old-law takings (Umm Al-Qura, 23 January 2026).

Key figures at a glance

What the expropriation law Saudi Arabia pays, and the 10% almost nobody quotes

Article 6(1) has fixed compensation at three limbs since 17 January 2026: market value, an indemnity of 20% of it, and damages from the procedures. Article 6(2) does the same for temporary possession, at not less than comparable rent plus 20% of that rent, capped at three years and extendable once with the committee's and the owners' consent (Article 28) (Umm Al-Qura). The two limbs are not drafted alike. A taking is compensated based on market value, possession at not less than comparable rent. Only the second sets a floor.

A third percentage rarely travels with the other two. Article 24(1) owes an owner who vacates before compensation is complete comparable rent plus 10% of it, and where a government grant plot is swapped rather than paid for, Article 19(2) requires the replacement to be worth between 20% and 40% more than the plot taken (Umm Al-Qura, in force 17 January 2026). Two tax reliefs came with the law (Al-Watan, 18 January 2026): real estate transaction tax relief on a replacement purchase, capped at the tax on the full compensation and only within five years; and white land fee relief on replacement land, for a period Article 17(2) leaves two ministers to agree and nobody publishes.

Which law governs your file, and why the gazette date is the wrong test

Royal Decree M/56 keeps the repealed 2003 law over every case in which a decision approving the start of procedures was issued before 17 January 2026 (Umm Al-Qura). The test is the date of issue, not of publication.

The gazette has supplied the proof twice. A State Security Presidency decision dated about 12 January 2026 was published on 23 January 2026, six days after the new law took effect, and runs on the repealed statute throughout: old inventory and estimation committees, and 60 days to object at the Board of Grievances under the old Article 24 (Umm Al-Qura). Three months on, a National Water Company notice gazetted 17 April 2026 has the old estimation committee closing five Eastern Province files, from 520 sqm in Qatif to 14,436.90 sqm in Jubail, giving owners one week to attend its Dammam head office, inspect their assessed compensation and sign for it (Umm Al-Qura).

Copy that 60-day clause forward and you have the second widely repeated error. Article 36 of the current law says only that an affected person may object "in accordance with the relevant statutory procedures" (Umm Al-Qura). It sets no period and names no forum. The 60 days at the Board of Grievances belongs to Article 24 of the repealed law, and it survives because grandfathered decisions keep printing it (Umm Al-Qura, 31 March 2023). Quoted as current law, it invents a deadline.

Who decides, who values, and who pays the valuers

The start decision is no longer a minister's signature. Applications go to a committee, or more than one, formed inside the State Properties General Authority, chaired by its Governor, seating nine government bodies and deciding by a two-thirds majority (Article 8). Nor need the applicant be a ministry: Article 1(6) opens the project-owner role to any government body, company or public-benefit association, which is how a giga-project vehicle takes land (Umm Al-Qura).

Valuation has moved outside the taker, but not completely. Article 14 gives the property and its comparable rent to three accredited valuers who inspect independently, and puts the contract and the fees on the project owner: independent of one another, not of the payer. A three-valuer panel inside the Authority then discards any valuation that fails the approved standards, averages what survives, and the Governor signs the price within 90 days of the inventory report reaching the Authority (Article 15) (Umm Al-Qura).

What was actually expropriated in 2025, and where

The State Properties General Authority recorded about 24,122 expropriation cases in calendar 2025, on 6,626,423 sqm (Al-Watan, 1 March 2026). Every one of those files ran under the repealed law, with no indemnity and no independent valuer panel, so the volumes and the 20% must never be printed as one number.

Makkah region holds 22,987 of those cases and 3,036,585 sqm of that area: 95.3% of the count, 45.8% of the land. The national mean parcel is 274.7 sqm, Makkah's is 132.1 sqm, and Riyadh's 110 cases cover 891,000 sqm, roughly 8,100 sqm each. One statute, two operations: house-by-house assembly around the Haram, and corridor and utility land everywhere else.

Set the indemnity against the market it lands in. GASTAT's index rose 1.3% year on year in Q2 2026, with Makkah region at +0.4% and residential land at +6.3% year on year, +6.1% on the quarter (GASTAT). A one-off 20% is fifty times a year of price movement in the region carrying 95% of the cases, a single payment set against an annual rate.

Against that quarterly land print, read Article 20: it freezes the inventory at gazette publication but prices the plot at the first valuer's site visit. The interval is unregulated, and in a market moving that fast it is worth money to whichever side it favours (see Riyadh land prices by district). For a corridor owner, one repeal may be worth more than the indemnity. Outside the development-protection boundary, Article 3 of the 2003 law let the State take up to 12% of a plot larger than 10,000 sqm for main roads and pay nothing for it, as long as 10,000 sqm was left after the cut (repealed law). The current law has no equivalent article.

The parts of the file nobody has published

The law is in force and the instrument that runs it is not. Article 38 required the Implementing Regulation within 120 days of publication, which is the law's own effective date (Umm Al-Qura). A search of Umm Al-Qura's index on 29 August 2026 returned no such regulation, and MOMRAH's legislation page still serves the 2015 regulation of the repealed law (MOMRAH). Absence from an index we can search is evidence, not proof. It is also seven months past the Article 38 deadline.

"The Regulation" appears 31 times across the 39 gazetted articles, 23 of those as express delegations spread over 16 articles, from the cost-reservation mechanism to the in-kind compensation rules (Umm Al-Qura). The 2003 law's own regulation took about twelve and a half years to arrive (Umm Al-Qura).

Omran estimate: FY2024 expropriation compensation of SAR 35bn to SAR 42bn. Page 54 of the FY2025 Budget Statement puts FY2025 capital expenditure of about SAR 184bn at 6.9% below the FY2024 expectation, and 18.3% above that same year once non-recurring expropriation costs are excluded. Off one base, those imply an FY2024 expectation of SAR 197.6bn and an ex-expropriation base of SAR 155.5bn: a gap of SAR 42bn, the high end. FY2024 actually landed at SAR 191bn (FY2026 statement), so the same subtraction off the actual gives SAR 35bn, the low end. Both ends rest on one sentence in one statement, and the Ministry never puts the word beside a number. All of it is old-regime money carrying no indemnity: at 20% of that base, the current law would have added SAR 7bn to SAR 8.4bn to a single year's programme.

Omran estimate: about 31 expropriation valuations per real-estate valuer per year, at 2025 volumes. Article 14 requires three independently inspecting valuers per file, with a review panel of three above them. At the 2025 count, 24,122 cases at three valuers each is 72,366 valuations a year. The last confirmable count of the profession is November 2021: about 3,000 accredited valuers across all branches, of whom 2,323 were real-estate valuers (Al-Eqtisadiah). That is 31 valuations per real-estate valuer per year. A case may cover several parcels and the headcount has grown since, so read the order of magnitude: valuation capacity, not the 20%, is the constraint worth watching.

Article 6(3) hands the working out of "market value" and "damages" to the valuation Authority's standards rather than to the statute. The 20% is in the law; what it is 20% of is not, and no compensation figure is published anywhere, per case or per sqm, under either regime. Omran reads these decisions where they appear, in the Arabic gazette, one at a time. Ask for the underlying table if you are pricing land-assembly risk.

FAQ

What does the Saudi expropriation law pay for a property taken for public interest? Market value, plus an indemnity of 20% of that value, plus damages, under Article 6(1) of the law in force since 17 January 2026. Temporary possession pays not less than comparable rent plus 20% of it.

When did the new law take effect, and what happens to expropriations that started before? It was gazetted on 19 September 2025 with a 120-day commencement clause, and Saudi coverage on 18 January 2026 reported it in force the day before: 17 January 2026. The repealed 2003 law, which carried no uplift, still governs every case whose start decision issued before that date, whenever it is published: one was gazetted on 23 January 2026.

Can I object to an expropriation decision, and how long do I have? Article 36 gives a right to object "in accordance with the relevant statutory procedures", with no period and no forum. The widely repeated 60 days at the Board of Grievances is Article 24 of the repealed 2003 law, binding grandfathered files only.

How do I find out whether a plot sits inside an expropriation project plan? There is no public register, map or lookup. Start decisions appear one at a time in Umm Al-Qura and in a local newspaper, and Article 31 obliges a seller to tell a buyer what has been done.

Sources

• Umm Al-Qura, Law of Expropriation of Real Estate for the Public Interest and Temporary Possession, gazetted 19 Sep 2025: link
• Umm Al-Qura, Royal Decree M/56, the transitional rule: link
• Umm Al-Qura, State Security Presidency decision, old-law taking gazetted 23 Jan 2026: link
• Umm Al-Qura, National Water Company notice, five Eastern Province files closed under the old law, 17 Apr 2026: link
• Umm Al-Qura, old-law start decision carrying the 60-day objection clause, 31 Mar 2023: link
• Umm Al-Qura, Council of Ministers Resolution 586 of 1444 AH, reciting the 2015 regulation of the repealed law: link
• State Properties General Authority, published copy of the repealed Law M/15 of 1424 AH (the 12% road cut), via the Internet Archive: link
• Al-Watan, 18 Jan 2026, entry into force and the two tax reliefs: link
• Al-Watan, 1 Mar 2026, the Authority's 2025 case counts and areas by region: link
• Ministry of Finance, Budget Statement FY2026 (CAPEX series and the expropriation attribution): link
• Ministry of Finance, Budget Statement FY2025, page 54 (the 6.9% and 18.3% sentence): link
• GASTAT, Real Estate Price Index Q2 2026 (national, regional and land-component prints): link
• Al-Eqtisadiah, 10 Nov 2021, Saudi Authority for Accredited Valuers headcount (2,323 real-estate valuers): link
• MOMRAH legislation page for the executive regulation, still serving the 2015 text of the repealed law: link