Five Legal Risks Landowners May Face After the Amendments
The amended White Land Fees Law imposes an annual fee not exceeding 10% of the land’s value on undeveloped white lands owned by one or more natural or legal persons (excluding state-owned properties).
As a result, landowners now face five significant legal risks, which Al-Salamah Law Firm and Legal Consultants explains below.
Table Of Contents
1. Paying Annual Fees
This is the most direct and fundamental risk under the new system, as an annual fee is now imposed on undeveloped white lands.
In some cases, companies owning undeveloped land within Riyadh’s urban boundaries face annual fees of up to SAR 74 million representing a substantial ongoing cost that yields no income unless the land is developed.
This fee is due regardless of the owner’s intent or ability to develop the property in that year.
How to mitigate this risk:
- Begin developing the land in line with planning and building regulations whether for residential, commercial, or mixed-use projects.
- If development isn’t feasible, sell the land to a capable developer to avoid fee accumulation.
- Partner with a real estate developer to jointly develop the land and share profits.
Apply for a fee exemption (insert exemption article link here).
2. Risk of Increased Fees
The law imposes penalties for delayed payment or attempts to evade fees within a specified time after notification.
These penalties add a financial burden on the landowner.
How to mitigate this risk:
- Pay the fees on time to avoid any late penalties.
- Contact Al-Salamah Law Firm and Legal Consultants, as we represent clients before the Ministry of Housing and handle formal objections to increased fees on their behalf.
3. Entry into New Implementation Phases
The White Land Fees System is applied in phases, starting with specific areas (such as Riyadh in Phase One) and gradually expanding to include new regions or types of land.
The risk lies in owning land that was previously outside the system’s scope but later becomes subject to fees as new phases are implemented requiring immediate action.
Example:
Fahd owns a plot in a suburb near Riyadh that wasn’t included in the first phase. He assumed he had time before being charged. Later, the Ministry of Housing announced the launch of Phase Two or Three, which included his area suddenly, Fahd was liable for annual fees, creating financial pressure and forcing a quick decision.
How to mitigate this risk:
- Monitor announcements from the Ministry of Housing and the White Land Fees Program regarding new phases or geographic expansions.
- Even if your land is currently exempt, plan ahead (development or sale) in case it becomes subject to the system.
Consult Al-Salamah Law Firm and Legal Consultants to assess how new phases may impact your property.
4. Difficulty Objecting to Land Valuation
Fee amounts are based on the assessed value of the land, typically determined by specialized committees.
The risk arises when the owner believes the valuation is unfair or above market value yet the objection process can be complex, requiring detailed documentation and not always resulting in a revised valuation.
How to mitigate this risk:
- Before objecting, collect strong supporting evidence, such as independent valuation reports from certified appraisers or recent comparable land sales.
- Seek guidance from Al-Salamah Law Firm, which can help you navigate the updated objection procedures, comply with filing deadlines, and prepare a well-documented objection file.
5. Risk of Land Confiscation Due to Accumulated Fees
This is the most severe consequence of non-payment.
If fees accumulate and remain unpaid, government authorities have the right to take legal action that may include selling the land at a public auction to recover the owed amount and in rare cases, confiscating the property.
How to mitigate this risk:
- Treat white land fees as a mandatory financial obligation and include them in your annual budget.
- If you face genuine financial difficulty, don’t wait for fees to pile up consider selling, partnering with a developer, or seeking financing to cover payments.
- In some cases, the Ministry of Housing may allow payment scheduling if valid reasons for financial hardship are presented.
Frequently Asked Questions
What is the minimum land size subject to the fees?
Lands not less than 5,000 m² in area
What is the legal deadline for paying the White Land Fees?
Within 90 days from the date of official notification.
What is the legal deadline for developing the land?
One calendar year from the date of the fee invoice.
When is a land exempt from the fee?
If any of the required conditions for imposing the fee are not met.
If there is a legal barrier preventing the owner from dealing with the property during the payment period, provided the owner didn’t cause it.
If there is an administrative obstacle delaying construction permits or development approvals, provided the owner isn’t responsible for it.
If the land is developed or built within the legal timeframe.
Understanding these legal risks and taking proactive measures to address them is essential for white
landowners to protect their investments and avoid potential losses.
Al-Salamah Law Firm and Legal Consultants provides comprehensive legal support and expert guidance to help you navigate the new White Land Fees and Vacant Property System and its implementing regulations.
If you wish to file an official objection to the fees or inquire about whether your land qualifies for an exemption, Al-Salamah Law Firm is ready to assist you.
READ MORE :The New White Land Fees System
