MULKIYA · GUIDES
Buying Off-Plan Safely in Saudi Arabia: Licences and Escrow Accounts
Off-plan buying is legal for foreigners inside the designated zones, and protected: every project needs its own licence, and your instalments sit in escrow.
Off-plan is open, inside the zones
Since Royal Decree M/14 entered into force on 22 January 2026, foreign buyers may purchase property inside the designated zones, and that includes homes still under construction. The zones were endorsed by Council of Ministers Decision 43 of 23 June 2026, and 100+ now appear on the official register. Much of the new supply in those zones is sold off-plan, so the protections around it matter from day one.
The licence comes first
No developer may legally sell off-plan without a government licence for that specific project, under the off-plan sales law in force since April 2024. The licence is per project, not per company. A licensed developer with ten projects holds ten licences. Every licensed project appears in a public database. Ask for the licence number and check it before you discuss price, payment plans or anything else. No licence means no deal.
Your money sits in escrow
When you buy off-plan, your instalments do not go to the developer. They go into a dedicated escrow account for that project, held at a bank. The developer draws from it only as construction progress is certified. This is the core protection: the money funding your building stays tied to your building. A developer who asks you to pay into any other account is asking you to give up that protection. Decline.
The caps that protect you
The law limits what a developer can take early. The booking deposit is capped at 5% of the price. A retention of 20% is held back until completion, and a further 5% for one year after handover, against defects. The 5% transfer tax still applies and is collected at registration. A payment plan that front-loads more than these limits allow is a warning sign, not a negotiation.
The checks a foreign buyer runs
Four checks, in order. Confirm the project sits inside a designated zone on the official register. Confirm the project's off-plan licence in the public database. Confirm the escrow account is held in the project's name at a bank. Read the payment plan against the legal caps. The market is cooling, with the official residential price index down year on year into 2026, so delivery certainty matters more than launch-week momentum.
The honest next step
Escrow protects your money only if you are eligible to buy in the first place, and class, zone and city decide that. Mulkiya's check asks five questions and returns a verdict from a deterministic rules engine cited to the law, not an opinion. Muslim buyers should answer carefully: the designated Makkah and Madinah zones are open to Muslim individuals worldwide, off-plan included, but closed to foreign companies. Run the check before you reserve a unit.
Can foreigners buy off-plan property in Saudi Arabia?
Yes, if they fall within an eligible buyer class and the project sits inside a designated zone. The same ownership law governs off-plan and completed property. The project must also hold its own off-plan licence.
What protects my instalments during construction?
They sit in the project's escrow account and are released to the developer only as construction progress is certified. Money not yet drawn stays in escrow, which is exactly why paying outside that account is the one mistake to avoid.
Can Muslims buy off-plan in Makkah and Madinah?
Yes. Muslim individuals, resident or not, anywhere in the world, may own directly in the designated holy-city zones, including off-plan units. Foreign companies may not. Premium Residency holders take usufruct of up to 99 years instead.