Expropriation Law Comes into Effect

We are pleased to share that the "Real Estate Expropriation for Public Interest and Temporary Possession Law" is now officially in effect. This comes after 120 days from its publication in the Official Gazette, and it has been actively applied since Saturday, 28 Rajab 1447 AH (January 17, 2026).

This law is not just a procedural update — it represents a complete framework of protections and rights for property owners. Its main goal is to ensure fair compensation under a unified standard, supervised by the General Authority for State Real Estate, which helps improve transparency and reduce inconsistencies in valuation and procedures.

The new system offers property owners several important benefits and guarantees to ensure fairness and clarity:

Attractive Cash Compensation:

Properties are valued by certified appraisers based on fair market value, with an additional 20% added as compensation for expropriation.

Temporary Possession Compensation:

If a property is taken temporarily, the owner is compensated based on market rent plus 20%.

Extended Tax Exemptions:

Owners are exempt from real estate transaction tax for five years when purchasing replacement properties, starting from the date they receive compensation.

White Land Fee Exemption:

If compensation is provided in the form of alternative land, the expropriated white land is exempt from related fees.

Strong Governance & Financial Guarantees:

Authorities must confirm the availability of required funds before starting expropriation, ensuring faster compensation payments.

State-Owned Alternatives First:

Project owners are required to look for state-owned property alternatives before resorting to expropriating private property.

This law reflects the regulator's effort to balance public project needs with protecting private property rights. It ensures fair and motivating compensation, clear financial guarantees, and exemptions that help reduce the financial burden on affected owners.

It also represents a modern legislative approach that strengthens trust and transparency, and confirms that private property is a protected right, only to be taken when absolutely necessary and under fair, well-defined rules.

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