Saudi Arabia has introduced a new white land tax system in Riyadh, setting out four geographic zones with varying fee rates to promote balanced urban growth and curb real estate speculation. The initiative is part of a broader strategy to regulate the property market in accordance with Crown Prince Mohammed bin Salman’s directives.TL;DR:
- Four priority zones in Riyadh will be subject to white land fees: Zone 1 at 10%, Zone 2 at 7.5%, Zone 3 at 5%, and Zone 4 at 2.5% of assessed land value.
- Only plots listed within official urban boundary maps and a minimum size of 5,000 square meters are eligible; outside-priority areas are exempt from fees but included in cumulative land holdings.
- Fees aim to incentivize land development, optimize land use, and address speculative holding, with annual reviews and adjustments mandated by the Ministry of Municipal and Rural Affairs and Housing.
Details of the white land fee program
As per Saudi Gazette, the newly delineated zones specify differentiated annual tax rates based on land location and development priority, ranging from 2.5% to 10% of the assessed value. The program applies to all types of undeveloped plots within designated urban boundaries, focusing on plots of at least 5,000 sqm in individual or cumulative ownership.A specialized technical committee comprised of accredited appraisers will set land values and monitor development timelines. Each committee term lasts three years and can be renewed. This committee’s assessments and recommendations provide transparency and consistency in implementing the fee structure.
Regulatory structure and oversight
The Ministry has established executive regulations mandating that all land uses in Riyadh’s eligible urban areas fall under the five-tier fee system. Plots outside the set priority zones are excluded from immediate fees but are tracked as part of an owner’s total undeveloped holdings, influencing future city planning reviews.Every year, the Ministry will evaluate land availability, housing supply, real estate transactions, pricing trends, and monopolistic practices. The results will inform decisions on whether to apply, change, or suspend fees in specific areas to keep urban development on track.
Strategic goals and urban impact
The white land tax is intended to:
- Prevent speculative land hoarding and encourage prompt development.
- Support affordable housing supply and maximize efficient land use.
- Foster balanced city expansion aligned with Riyadh’s economic and social growth agenda.
By regularly reviewing and adjusting the program, Saudi Arabia seeks to ensure that its property market supports diversity, efficiency, and long-term urban sustainability.
FAQ
Q. What is the purpose of Saudi Arabia’s new white land tax zones in Riyadh?The system encourages landowners to develop property, limits speculative holding, and supports more balanced urban expansion.Q. How are the land tax zones structured and taxed?There are four priority zones: Zone 1 at 10% land value, Zone 2 at 7.5%, Zone 3 at 5%, and Zone 4 at 2.5%; land outside priority zones is fee-exempt but tracked.Q. What qualifies a plot for the new tax?Eligible land must be within Riyadh’s official urban boundary maps and have a minimum size of 5,000 square meters, counted individually or as a cumulative holding.Q. How will land values and compliance be managed?A technical committee with licensed appraisers will assess property values and monitor timelines, while the ministry annually audits land supply, market activity, and fees.
