The Cabinet approved a move to let the Ministry of Municipalities and Housing sell residential units from its projects to people who are not eligible for housing support, according to state news agency SPA.

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The decision comes a week after the Cabinet approved a series of amendments to the White Land Tax law, that will see a new tax on vacant, ready-for-use properties, limited to 5% of their market value based on comparable annual rent. The tax on undeveloped land plots will also rise to a maximum of 10% of the property's value, increasing from 2.5%. Regulations for the amended law were scheduled for release within 90 days.

The White Land Tax amendments are expected to lead to an increase in supply over time, especially in high-demand markets such as Riyadh, Jeddah, and Makkah, Fouad Bekkar, CEO of AI real-estate marketing firm Coralytics, told EnterpriseAM. The added supply might help ease long-term price pressures — especially in the residential sector.

BUT- “There is a risk that some landowners may delay compliance or pass on associated costs to end buyers, potentially impacting affordability in the short term,” Bekkar said. Smaller developers may also face challenges related to capital mobilization, or navigating valuation and registration requirements.

To mitigate these risks, authorities will need to “pair the tax with streamlined development pathways, accessible financing, and transparent enforcement mechanisms,” Bekkar said. The tax would also have to be applied consistently across regions or property types, to avoid speculation in untaxed areas.

The new decisions come as part of wider real estate reforms launched early March, including lifting land freezes in the north of the capital, and new rental regulations aimed at balancing the landlord-tenant relationship. The refoms aim to expand land availability, improving rental regulations, and reining in soaring property prices in Riyadh.

ICYMI- Riyadh saw the highest increase in its real estate prices in 1Q 2025, up 10.7% y-o-y. Last year, apartment prices in Riyadh rose 10.6% y-o-y, while villa prices increased 6.3%. Overall, the real estate price index rose 4.3% y-o-y over the same period, driven primarily by a 5.1% rise in residential property prices and a 2.5% uptick in commercial real estate prices.

IN OTHER REAL ESTATE NEWS-

NHC plans to establish industrial logistics zones to support projects in the western and eastern regions, CEO Mohammad Albuty told Aleqtisadiah. The Riyadh logistics zone is in an advanced stage in partnership with a major Chinese firm, with work set to begin “very soon.”

On the residential front: The company is developing residential projects covering up to 100 mn sqm, aiming to deliver 300k units this year and another 300k by 2030 as part of a bigger plan to build affordable housing options to close the 1.2 mn housing units gap needed to achieve a 70% home ownership target by 2030. It may add another 100k housing units this year to the 200k already in the pipeline.

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