White Land Fees in Saudi Arabia: Everything You Need to Know

With the significant urban expansion in the Kingdom, the issue of monopolizing white lands within cities and failing to utilize them has emerged, leading to rising land and real estate prices. The wise solution from the government was to impose white land fees, which aim to encourage landowners to develop their properties and increase the supply of developed land, thereby easing the housing crisis.

In this article, we explain everything about white land fees: what they are, their percentage, who is exempt, and how to pay them. Follow along with us 👇

What Are White Land Fees?

White land fees are an annual fee imposed by the Ministry of Municipalities and Housing on undeveloped (vacant) lands within the urban boundaries of cities and designated areas. The goal of these fees is to: encourage landowners to invest in their lands instead of leaving them idle, increase the supply of developed land, and reduce real estate prices overall.

The white land fee system was issued by the Council of Ministers in 1436 AH (2015 AD) and began implementation in 1437 AH (2016 AD).

What Is the Fee Percentage?

The annual fee for white lands is 2.5% of the market value of the land. For example, if you own a land valued at 1 million SAR, the annual fee would be 25,000 SAR. The value is calculated based on an official assessment by the General Authority for Real Estate.

Who Does the Decision Apply To?

The fees apply to:

  • Individuals — Saudi and non-Saudi owners of white lands within urban boundaries
  • Companies and institutions — of all types
  • Privately owned lands — that are not being developed

Who Is Exempt from the Fees?

There are several cases where a landowner is exempt from these fees:

  • Government lands — owned by the state or public entities
  • Agricultural lands — located outside urban boundaries
  • Granted lands — allocated to individuals by the state within the specified timeframe in the system
  • Very small plots — with an area below the minimum threshold (varies by region)
  • Lands under active development — if there is a valid construction permit or an ongoing development project
  • Charitable entities — for lands used in their activities
  • Public utilities — such as mosques, schools, and hospitals

How Is the Assessment and Collection Done?

The Ministry of Municipalities and Housing is responsible for implementing the system. Land values are assessed based on specific market criteria, and owners are notified of the due amount. The system ultimately aims to:

  • Increase the supply of developed residential lands by up to 15-20%
  • Reduce real estate prices and ease the burden on citizens
  • Limit the phenomenon of white land monopolization
  • Encourage the private sector to engage in real estate development

It is worth noting that the system provides a grace period for white land owners to develop or subdivide their lands before fees are applied. If the owner delays payment, late fees will be imposed.

The Difference Between White Land Fees and Real Estate Transfer Tax

Many people confuse white land fees with real estate transfer tax. However, the difference is clear:

  • White land fees: An annual fee imposed on vacant, undeveloped land within cities.
  • Real estate transfer tax: A one-time tax paid when buying or selling a property (5% of the transaction value).

Frequently Asked Questions (FAQ)

Q: Do white land fees apply to all cities in Saudi Arabia?
A: No, they apply to cities and areas designated by the Ministry based on priority. However, the coverage area is gradually expanding.

Q: If I sell the land before paying the fees, am I still responsible for them?

Fees, am I responsible?

A: Fees are due from the owner at the time of due date, and you are responsible as long as the land is registered in your name.

Q: How do I know if my land is subject to fees?
A: You can check with the Ministry of Municipal and Rural Affairs and Housing or the electronic platform dedicated to municipal services to confirm.

Q: Do fees apply to inherited lands?
A: Any white land within the urban boundary is subject to fees, whether inherited or purchased. However, heirs have a special status in some cases according to the system.

Q: What is the ultimate goal of these fees?
A: Increasing the supply of developed lands, reducing real estate prices, and achieving the housing program goals in Saudi Vision 2030.

The white land fees system is considered one of the most important government solutions to address the housing crisis and high real estate prices in the Kingdom. If you have an additional question, write it to us in the comments 👇