Saudi expropriation law now pays market value plus 20%

Since 17 January 2026, an owner whose property the Saudi state takes is paid market value, an extra 20% of that value, and any damages the procedure causes (Umm Al-Qura, Article 6(1)). Temporary possession pays at least comparable rent, plus 20% of that rent. The law is not retroactive. Any file whose start decision was issued before 17 January 2026 stays under the repealed 2003 law, which paid no uplift. The gazette printed one such old-law taking on 23 January 2026, six days after the switch (Umm Al-Qura).

Key figures at a glance

What owners are paid

Article 6(1) sets compensation for a taking in three parts: market value, an indemnity of 20% of it, and damages from the procedure. Article 6(2) covers temporary possession at not less than comparable rent plus 20%. Possession is capped at three years and can be extended once, with the consent of the committee and the owners (Article 28) (Umm Al-Qura).

The wording differs between the two. A taking is paid based on market value. Possession is paid not less than comparable rent. Only the second is a floor.

There is a third percentage. Under Article 24(1), an owner who moves out before being fully paid gets comparable rent plus 10% of it. And where a government grant plot is swapped rather than bought, Article 19(2) says the replacement must be worth 20% to 40% more than the plot taken (Umm Al-Qura).

Two tax reliefs came with the law (Al-Watan, 18 January 2026). One is real estate transaction tax relief on a replacement purchase, capped at the tax on the full compensation and valid for five years. The other is white land fee relief on replacement land. Article 17(2) leaves its length to two ministers, and they have not published it.

Which law applies to your file

Royal Decree M/56 keeps the 2003 law for every case where the decision to start procedures was issued before 17 January 2026 (Umm Al-Qura). What counts is the date of issue, not the date it appears in the gazette.

The gazette has shown this twice. A State Security Presidency decision dated about 12 January 2026 was published on 23 January 2026. It runs entirely on the old statute, with the old committees and 60 days to object at the Board of Grievances under the old Article 24 (Umm Al-Qura).

Then on 17 April 2026, a National Water Company notice had the old estimation committee closing five Eastern Province files. They ranged from 520 sqm in Qatif to 14,436.90 sqm in Jubail. Owners had one week to come to the Dammam head office, see their compensation and sign for it (Umm Al-Qura).

That 60-day clause is still quoted as current law, wrongly. Article 36 of the new law only says an affected person may object "in accordance with the relevant statutory procedures" (Umm Al-Qura). It gives no deadline and names no court. The 60 days comes from Article 24 of the repealed law, and it keeps appearing because old-law decisions still print it (Umm Al-Qura, 31 March 2023).

Who decides and who values

A minister no longer signs off the start of a taking. Applications go to one or more committees inside the State Properties General Authority. Its Governor chairs them, nine government bodies sit on them, and decisions need a two-thirds majority (Article 8).

The applicant need not be a ministry either. Article 1(6) lets any government body, company or public-benefit association act as project owner. That is how a giga-project company takes land (Umm Al-Qura).

Valuation is more independent than before, though not fully. Article 14 sends each property to three accredited valuers who inspect separately. The project owner hires and pays them. A panel of three valuers at the Authority then throws out any valuation that misses the standards and averages the rest. The Governor signs the price within 90 days of receiving the inventory report (Article 15) (Umm Al-Qura).

What was taken in 2025, and where

The Authority recorded about 24,122 expropriation cases in 2025, covering 6,626,423 sqm (Al-Watan, 1 March 2026). All of them ran under the old law, with no indemnity and no valuer panel. Those volumes should never be quoted alongside the 20% as if they were one figure.

Makkah region alone accounts for 22,987 cases, 95.3% of the national count, yet only 45.8% of the land taken. Riyadh had just 110 cases. Around the Haram the state is buying houses one by one. Elsewhere it is mostly taking land for roads and utilities.

Cases

95.3% 

Land taken (sqm)

45.8% 

Makkah region prices rose 0.4% year on year in Q2 2026 (GASTAT). In Makkah, a one-off 20% is about fifty times a year of price growth.

Article 20 freezes the inventory when the decision is gazetted, but the plot is priced at the first valuer's site visit. Nothing governs the gap between the two, and with land prices moving this fast, it is worth money to one side or the other (see Riyadh land prices by district).

For owners of land along new roads, one repeal may matter more than the 20%. Outside the development boundary, Article 3 of the 2003 law let the state take up to 12% of a plot over 10,000 sqm for main roads without paying, as long as 10,000 sqm remained (repealed law). The new law has no such article.

What is still missing

The implementing regulation has not been published. Article 38 required it within 120 days of publication, which is the law's own start date (Umm Al-Qura). We searched the Umm Al-Qura index on 29 August 2026 and found nothing. MOMRAH's legislation page still shows the 2015 regulation of the old law (MOMRAH). We cannot be certain it does not exist, but it is now seven months late.

"The Regulation" appears 31 times in the 39 articles. In 23 of those, spread over 16 articles, the law hands a decision to it, from how costs are reserved to how compensation in kind works (Umm Al-Qura). The 2003 law waited about twelve and a half years for its own regulation (Umm Al-Qura).

Omran estimate: FY2024 expropriation compensation of SAR 35bn to SAR 42bn. The Ministry never states the figure. We back it out of one sentence on page 54 of the FY2025 Budget Statement, which puts FY2025 capital spending 6.9% below the FY2024 expectation, and 18.3% above it once one-off expropriation costs are removed.

All of it was paid under the old law. At 20%, the new law would have added SAR 7bn to SAR 8.4bn in that one year.

Omran estimate: about 31 expropriation valuations per real-estate valuer per year, at 2025 volumes. Article 14 needs three valuers per file, with a panel of three above them. At 2025 volumes, 24,122 cases means 72,366 valuations a year. The last firm count of the profession, from November 2021, was about 3,000 accredited valuers, 2,323 of them in real estate (Al-Eqtisadiah). That works out at 31 valuations per real-estate valuer per year. One case can cover several parcels and there are more valuers now, so treat it as an order of magnitude. We think valuer capacity, more than the 20%, is the thing to watch.

Article 6(3) leaves the meaning of "market value" and "damages" to the valuation authority's standards, so the base the 20% applies to is set outside the law. We read these decisions in the Arabic gazette as they appear. 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 20% of that value, plus damages (Article 6(1)). Temporary possession pays at least comparable rent plus 20%.

When did the new law take effect, and what happens to expropriations that started before? It was gazetted on 19 September 2025 and took effect on 17 January 2026. Any case whose start decision was issued before that date stays under the 2003 law, which paid no uplift, even if it is published later.

Can I object to an expropriation decision, and how long do I have? Article 36 gives a right to object but sets no deadline and names no court. The 60 days often quoted comes from the 2003 law and applies only to old-law files.

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

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