White Land Tax in Saudi Arabia: Implementing Regulations and Riyadh Roll-Out

On 12 May 2025, the Saudi Council of Ministers issued Resolution No. 758, approving amendments to the White Land Tax Law issued by Royal Decree number (M/4) dated 12/02/1437H, corresponding to 24/11/2015G, now officially renamed the “White Land and Vacant Property Tax Law” (the “Law”). These changes mark a substantial expansion in the Law’s scope, fee structure, and compliance obligations. The amendments are part of Saudi Arabia’s ongoing real estate reform under Vision 2030, aiming to stimulate urban development, increase housing supply, and curb speculative landholding.

The Law applies to owners of land parcels of 5,000 m² or more, whether held as a single plot or through multiple aggregated holdings within the same city. It covers all developable land and vacant properties within urban boundaries, regardless of zoning, whether residential, commercial, or mixed use.

Application of the Law is limited to land located within the urban boundaries of each relevant city. These boundaries are set out on the official maps issued by the Ministry of Municipalities and Housing. They define the limits of urban activities and the relevant city’s growth over a specified period and determine which areas are subject to the fee once announced by ministerial decision.

Implementing Regulations

The (“Implementing Regulations”) to the Law have now been issued in the Official Gazette and are in force. They provide operational detail on:

• Definitions: including what constitutes “white land”, “development”, and how the land is assessed in terms of access to infrastructure and utilities.
• Application process: how covered cities and their urban boundaries are designated by ministerial decision, with maps published to show the affected areas.
• Owner obligations: registration and filing through the Ministry’s electronic portal, including ownership documentation and detailed plot information.
• Valuation: establishment of valuation committees to determine land values and set relevant benchmarks.
• Invoicing: annual invoices issued by the Ministry specifying taxpayer details, land information, applicable rate, amount due, payment method, deadline, and rights of objection.
• Payment: fees must be paid within one Gregorian year from the invoice date, with extensions possible where genuine development or construction is in progress.
• Suspension: fee liability is suspended where legal or administrative barriers exist or where the land is under active development.
• Penalties: fines may be imposed for late filing, failure to pay, or other forms of non-compliance, in addition to collection of the underlying fee.

The separate implementing regulations for vacant properties have not yet been issued and are expected within the year.

Priority Structure for Fees

The Implementing Regulations establish a tiered fee structure based on geographic priority:

• Priority I – 10%
• Priority II – 7.5%
• Priority III – 5%
• Priority IV – 2.5%
• Outside designated zones – 0%

This replaces the uniform 2.5% rate under the previous law. All collected taxes and fines will be deposited into a dedicated account with the Saudi Central Bank and allocated to housing projects.

Riyadh Roll-Out

The Ministry has designated zones in Riyadh with different fee rates:

• 10% – High-demand areas such as Al-Malqa, Hittin, Al-Nakhil, Al-Yasmin, Al-Sahafa, Al-Sulaimaniyah, and surrounding districts.
• 7.5% – The commercial corridor along Prince Mohammed bin Salman Road (Al-Munsiyah and Qurtubah).
• 5% – Mid-ring districts including Al-Munsiyah, Qurtubah, Al-Rayan, Al-Rawdhah, Al-Naseem, Ishbiliyah, Al-Hamra, and Al-Salam.
• 2.5% – Outlying districts such as Al-Nazim, Al-Jadariyah, Al-Shifa, Al-Rimal, Dhahiyat Namar, parts of Al-Aziziyah, Dirab, Al-Awali, and parts of Al-Khir.
• 0% – Parts of Al-Khir and Manah East Riyadh (currently exempt).

Relevance

These changes affect a wide range of stakeholders, including landowners, developers, and institutional investors. The broadened scope means both undeveloped land and, once applicable regulations are issued, vacant buildings may be subject to fees.

Market activity in the past couple of weeks already reflects the impact of the new law with a noticeable number of large plots have been listed for sale, as owners seek to reduce exposure before invoices are issued. This trend demonstrates how the Law is expected to alter holding strategies and accelerate the release of land for development, aligning with Saudi Arabia’s Vision 2030 goals.

How can we help?

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