The Executive Regulations of the Vacant Land Fees System classify land subject to the system into five categories based on area, as follows:

– Category 1: Undeveloped land with an area of 500,000 square meters or more.

– Category 2: Undeveloped land with an area of 250,000 square meters or more.

– Category 3: Undeveloped land with an area of 100,000 square meters or more.

– Category 4: Undeveloped land with an area of 40,000 square meters or more.

– Phase Five: Undeveloped land with an area of 10,000 square meters or more.

Deadline for submitting documents and data for each phase

The Executive Regulations for the Vacant Land Fees System—expected to be issued on the 3rd of Ramadan—set a deadline of no more than six months from the date the specific phase is designated for implementation, for the owner to submit to the Ministry the documents and data related to their land, along with a statement outlining any regulatory obstacles they perceive to the application of the fee (if any). This deadline is not included in the period subject to the fee.

Within a period not exceeding two months from the expiration of the deadline for submitting documents and data regarding the land, the Minister of Housing shall issue decisions identifying the land subject to the fee, including the information specified in the second paragraph of Article 20 of the regulations, If the specified deadline passes without the liable party (landowner) submitting the documents and data pertaining to their land, the Minister shall issue a decision regarding that land based on the data available to the Ministry concerning the land, The taxpayer shall be notified of the decision through its publication in the Official Gazette, and the date of publication of the decision in this case shall be the date the fee becomes due.

Mechanisms for Assessing Fees

The value of the land subject to the fee shall be assessed as of the date of the announcement, as follows: The location of the land within the city’s urban area, taking into account the values of comparable lands, their uses, the building codes applicable to them, the availability of public services, and access to public utilities. The Ministry may establish detailed provisions for these criteria.

As for government-owned land, it is subject to the land fee as a private legal entity, and each government agency must provide the Ministry with a statement detailing all vacant land it owns and the revenue it derives from such land in its capacity as a private legal entity, A committee within the Ministry of Housing shall be responsible for appraising the value of the land, and the committee may engage appraisers accredited by the Saudi Authority for Accredited Appraisers. The Ministry may form other committees in the regions.

Implementation Phases

Regarding the implementation phases, the regulations stipulate that, effective as of the system’s entry into force, the Ministry of Housing shall identify the cities where there is a need to increase the housing supply to achieve a balance between supply and demand, based on the Ministry’s available land data.The Ministry also announces the categories of land subject to the fee within the designated cities. The Ministry will review the situation in a specific city annually to determine whether the necessary conditions for applying the system to the land in that city are met, whether to suspend application, or whether to move to any of the subsequent phases in the same city, Each of the specified phases includes developed land belonging to a single owner within a single approved master plan, provided that the total area of such land is not less than the area specified for that phase.

If a particular phase does not apply to a specific city, or if the land within a particular phase is insufficient to achieve the required balance between supply and demand, it is permissible—by decision of the Minister—to move to any subsequent phase.

Criteria and Conditions for Vacant Land

The regulation stipulates that land is subject to the fee whenever it meets all of the following criteria: It must be vacant land. It must be within the urban area. It must be zoned for residential or residential-commercial use according to the city’s approved master plan by the Ministry of Municipal and Rural Affairs, and it must fall within the categories specified by the Ministry in accordance with the target categories as set forth in Article 9 of these regulations.

The value of the land is assessed by identifying the services and utilities, and the value is determined—as a percentage – for each service or facility based on the necessity of that service or facility for residential use. A base value for the land is determined in accordance with the criteria set forth in these regulations, and the value of the coefficient specified for the unavailability of each service or facility is deducted from the base value. Note that the coefficient value does not change based on the city or the location of the land; however, the coefficient value may be adjusted during each annual review conducted by the Ministry in accordance with the provisions of Article 8 of these regulations.

Collection of Fees

The fee shall be collected as follows: The due date of the fee is the date on which the taxpayer is notified of the decision and the amount of the fee due. The taxpayer may pay the fee within a period not exceeding one year from the date of the decision; the Hijri calendar shall be used to determine the length of the year. If the land subject to the fee is mortgaged and registered in the name of the mortgagee, the mortgagee shall be liable for payment after the taxpayer. Failure to pay the fee does not affect the landowner’s right to dispose of or develop the land, except as provided for in the regulations. Exemption from the fee or deferral of its collection is permitted only in accordance with the provisions of the State Revenue Law. Fees and penalties are collected via email.