Ministry of Municipalities and Housing launched the draft «Executive Regulations for Vacant Property Fees» for feedback until April 25, 2026, explaining that all uses of vacant properties will be subject to the application of the fee without exception. The project obliges owners to pay the fees according to their ownership percentages, in case of multiple partners, whether they are individuals or legal entities.
The project requires owners to pay the fees according to their ownership percentages, in case of multiple partners, whether they are individuals or legal entities.
Owner Obligations and Mandatory Disclosure
The project requires owners of buildings subject to the fee to submit all required documents and data to the Ministry, and to disclose the status of real estate accurately, including new owners, while obliging everyone to update their data at least once during the reference year determined by the Ministry.
The project requires owners of buildings subject to the fee to submit all required documents and data to the Ministry.
Valuation and value assessment committees Mechanism for calculating fees and approved criteria
Indicators for applying the fee to cities Regular review of market conditions Regular review of market conditions Conditions for subjecting properties to the fee Regulation of the fee is in place.
Measures to ensure fairness and prevent evasion Measures to ensure fairness and prevent evasion Financial obligations and payment dates
Collecting fees and directing revenues
The bill grants the ministry the authority to form one or more technical committees to estimate the like-for-like rent and the value of buildings subject to the fee, provided that the number of committee members is not less than three with experience in real estate valuation, including evaluators licensed by the Saudi Commission for Certified Valuers. The decisions of these committees are issued by majority, and their membership lasts for a period of three years, renewable or extendable.
The project stipulates that the estimation of like-for-like rent and the value of the due fee shall be based on criteria and evaluation mechanism approved by a decision of the Minister, including determining the average value of the building in the market based on similar properties in terms of location, type and use, in addition to determining the average rents within the urban area of each city. In case there is no similar property, the value of the land will be based on the type of use and location of the building.
The project identified a set of indicators for applying the fee to cities, most notably:
High vacancy rates in residential and commercial properties.
High housing costs compared to household income.
High real estate prices compared to the consumer price index.
The concentration of vacant property ownership by people who own more than one property.
The value of the fee and its limits
The project sets the annual fee on vacant properties at a percentage of the similar rent, not exceeding 5% of the value of the building, as well as specifying the uses of the properties covered by the fee, and setting a minimum number of vacant properties owned by a person to be subject to the application.
The bill authorizes the ministry to conduct a comprehensive annual review of the real estate market conditions, including assessing the volume of building supply, occupancy rates, trading levels, and average rents, in addition to monitoring monopolistic practices in any city or geographical area, in order to decide on the application of the fee.
The project stipulates a set of controls for the application of the fee, most notably:
The property is located within the scope of application.
It is capable of being occupied or ready to obtain an occupancy certificate.
It remains vacant for six months continuously or separately.
The use is compatible with the specified activities.
The number of owned properties reaches the threshold for application.
The consumption of services associated with the type of use is low.The application of the fee is suspended in a number of cases, including:
Removal of one of the conditions of subjection.
A barrier that prevents the property from being occupied without the owner's responsibility.
Transfer of ownership through a notarized sale.
A certificate of occupancy issued during the reference year.
Force majeure reasons for vacancy with supporting documents.
Registration of the property as a main address according to the regulations.
Enforcement control and evasion prevention.
The bill authorizes the ministry to take the necessary measures to ensure fair application of the fee, including standardizing the application and assessment criteria between cities, verifying the accuracy of the data submitted by taxpayers, coordinating with relevant authorities, in addition to the possibility of calculating fees for previous years starting from the date the property is subject to the system.
The project obliges taxpayers to pay the value of the fee and any fines resulting from the violation of the law or regulation within a period not exceeding six months from the date of issuance of the invoice. If the invoice is issued for previous years, it will be effective from the date of issuance, with a 90-day grace period for payment from the date of notification.
The project assigned the Ministry the responsibility of collecting fees and fines according to the approved statutory procedures, with the possibility of using the private sector to carry out the collection operations. It also stipulates the allocation of the proceeds of these fees to support housing projects, according to mechanisms to be agreed upon with the Ministry of Finance, in order to contribute to enhancing the sustainability of the real estate sector.
