The New White Land Fees System

The New White Land Fees System

White land is defined as any undeveloped land suitable for development within the urban boundaries. Due to the importance of such lands in Saudi Arabia, the White Land Fees system has been amended. The official newspaper Umm Al-Qura published the new amendments following the approval of the Prime Minister. The executive regulations were also updated by codifying new definitions and rules to ensure proper application of the fees on white lands within the urban scope of cities. This article by Salamah Law Firm and Legal Consultants outlines all the amendments to the new system and its executive regulations.

What Actually Changed in the White Land Fees System?

The most significant amendment is the system’s new title: “The White Land and Vacant Properties Fees System.” Amendments were introduced to the following articles:

• Article 1: Amendments to legal definitions and concepts.
  

   

• Article 3: Amendments to white land fees and introduction of new fees.
  

   

• Article 4: Updates on what must be included in the executive regulations.
  

   

• Article 5: Provisions for applying the system and its regulations.
  

   

• Article 6: New penalties for violations of the system.
  

   

• Article 7: How the specialized ministerial committee is formed.
  

   

• Article 8: Procedures for appealing decisions regarding fee application.
  

   

• Article 9: Implementation of the system and regulations by the Ministry of Municipalities and Housing.
  

   

• Article 11: Where fees and fines should be deposited.
  

   

Articles 2, 3, and 14: Clarification of the role of the ministry and ministerial committee regarding the new system and its regulations.

Key Amendments in the White Land and Vacant Properties Fees System

1. Increased Fee Rates

   The main amendment is the increase in the annual fees:

• Previously: 2.5% of land value.
  

   

• Now: 10% of land value.
  

   

• New annual fees are also imposed on vacant properties, set at the market rental equivalent, capped at 5% of the property’s value.

2. Landowners’ Obligations
   

   According to the amended Article 5, the property owner is always the primary party responsible for paying the fees or fines under the system unless such obligations are settled by an equivalent legal party.
   Therefore, tenants of white lands regardless of lease duration or purpose are not required to pay the annual fee.

3. New Criteria for Determining Fee Rates

   Amendments to Article 6 of the regulations establish new rules for calculating the annual fees on white lands within the city, based on development priorities:

• Tier 1 (highest priority): 10% annually.
  

   

• Tier 2 (high priority): 7.5% annually.
  

   

• Tier 3 (medium priority): 5% annually.
  

   

• Tier 4 (low priority): 2.5% annually.
  

   

• Tier 5 (outside priority areas): No annual fee, but included in the owner’s total white land holdings within the city.

4. New Conditions for Applying Fees

   According to the amended Article 7, land must meet the following conditions for fees to apply:

• It must be undeveloped (“white land”).
  

   

• It must be suitable for development or construction.
  

   

• It must fall within the designated fee-application boundary.
  

   

• Its area (or total land owned by one person in the city) must be 5,000 sqm or more.
  
  
• It must fall within the land-use categories specified in the decision.
  

   

Objectives of the System and Regulations

The system aims to:

• Increase the supply of developed land to balance supply and demand.
  

   

• Provide residential land at affordable prices.
  

   

• Protect fair competition and combat monopolistic practices.
  

   

• Increase the supply of both residential and commercial properties.
  

   

• Address “artificial scarcity” and land hoarding.
  

   

• Push owners and investors to actually develop their land.
  

   

• Achieve balance in the real estate market.
  

   

• Use fee revenues to finance housing and infrastructure projects.
  

   

Will These Fees Help Correct the Real Estate Market?

Yes. The stricter and more effective White Land Fees System and its executive regulations in Saudi Arabia will encourage development of unused urban land. These amendments will:

• Motivate owners to develop or sell their land instead of hoarding it, thereby increasing real estate supply and reducing price pressures.
  

   

• Serve as an effective tool to curb monopolistic practices and improve resource efficiency, helping correct the market by offering more competitive residential and investment opportunities.
  

   

Represent a crucial step in reforming the real estate market by boosting urban development, increasing supply, achieving a better supply-demand balance, reducing monopolies, stabilizing prices, and supporting Vision 2030 in housing and economic growth.

Questions and Answers

Salamah Law Firm and Legal Consultants provides full legal support and consultation to understand the new White Land and Vacant Properties Fees System and its executive regulations. If you wish to file a formal objection, our team is ready to assist you.

Read More : Objection or Grievance: What’s the Difference and How to Choose the Right Path?