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The Housing Ministry published the final executive regulations for the Kingdom’s White Land Tax Law in the Official Gazette, tightening enforcement on undeveloped plots within urban boundaries. The Ministry posted the draft regulations on Istitlaa in July.
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The details: All urban idle lands will be classified according to their development priorities into five categories, determined annually by Minister-appointed committees. Land plots in the highest-priority category will incur a 10% levy, falling to 7.5% for high-priority plots, 5% for the medium-priority plots, and 2.5% for the low-priority ones. A fifth category will not face annual fees but will still be counted within the total of undeveloped lands.
The tax applies to any plot (or aggregated holdings of one owner) of 5k sqm or larger within urban boundaries, with land co-owners individually liable for their proportional share of the tax. Taxes must be paid within one calendar year, and owners must pay all taxes before any transfers of ownership.
The exemptions: The tax is suspended if the land is fully developed before the deadline determined by the committees, with owners getting a refund of the full amount if they already paid their taxes. Lands are also exempted if they are deemed unbuildable for reasons beyond the owner’s control.
Revenue from taxes and fines will fund housing projects, in coordination with the Finance Ministry. The Housing Ministry will be responsible for setting collection dates, grant payment extensions, approving rules for disputes, and adjusting geographic coverage on an annual basis.
REMEMBER- The government recently introduced a battery of reforms to stimulate the real estate market. The changes allowed non-Saudis to own property and foreign investment in Makkah- and Madinah-based real estate companies, lifted development restrictions on 81 sq km of land in northern Riyadh, and saw amendments to the White Land Tax law, in addition to planning the release of 10k-40k affordable residential plots per year.
