In accordance with orders from Crown Prince Mohammed bin Salman, Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail announced the geographic zones for white land fees in Riyadh on Wednesday. This was a significant step toward controlling the real estate market and promoting balanced urban development.
According to Al-Hogail, the new program phase supports the ministry’s objectives of expanding supply and attaining equilibrium in the real estate industry while allowing landowners and developers to take advantage of opportunities.
Five tiers of annual fees are applied to undeveloped lands under the new framework:
- Priority Zone 1: 10% of land value
- Priority Zone 2: 7.5% of land value
- Priority Zone 3: 5% of land value
- Priority Zone 4: 2.5% of land value
- Outside priority areas: exempted from fees but counted within the owner’s total undeveloped land holdings in the city
The executive regulations for the white land charge program, which state that all land uses are liable to payments under the five-tier scheme, were previously approved by the minister.
The minimum qualifying size, whether as a single plot or the total holdings of one owner within Riyadh, is 5,000 square meters, and only plots included in official urban boundary maps are eligible.
To determine land values and establish development schedules, a specialist technical committee will be established, consisting of licensed appraisers from the Saudi Authority for Accredited Valuers. Membership in the committee is renewable for a period of three years.
Every year, the ministry is required to examine each city’s monopolistic behaviors, market activity, prices, and land and housing unit availability. In order to guarantee compatibility with urban development priorities, it may choose to implement, halt, or modify the land fee program’s scope in light of these reviews.
