Details of Real Estate Expropriation for Public Benefit Law

Riyadh city

The Official Gazette published the Law of Expropriation of Real Estate for Public Benefit and Temporary Taking of Property, recently approved by the Saudi Cabinet.

The law consists of 39 articles and will come into effect 120 days after its publication in the Official Gazette.

The law stipulates that no real estate may be expropriated or temporarily seized except for public interest and in return for fair compensation, in accordance with its provisions and regulations. In addition, the law does not apply to properties owned by the state or its entities, and expropriation or temporary seizure procedures may only be initiated if no state-owned properties are available to serve the purpose.

As per Article 5, public interest refers to anything that provides general benefit—development, prosperity, or prevention of public harm such as disasters or epidemics—where the benefit to society outweighs any private interest.

Compensation for expropriation is based on the market value of the property. An additional 20% of the market value is paid as compensation for the expropriation.

As for compensation for temporary seizure, it is not less than the fair rental value, as well as an additional 20% of the rental value.