Engineer Muhammad bin Ahmad Al-Madiheim, General Supervisor of the Vacant Land Tax Program at the Ministry of Housing and advisor to the minister, revealed—while answering questions from journalists at an informational session organized by the Riyadh Chamber of Commerce—the assessed value that will be applied to lands subject to the fees will be based on their assessed value rather than their market price. He noted that the assessment will be conducted electronically and made available to those subject to the fees, as the Ministry is considering a proposal that the assessment be conducted by three appraisal firms, explaining that the system stipulates that the valuation be conducted by a committee of three or more people, including one certified appraiser. He denied that the turnout for registration in the system was low, attributing the delay instead to the land surveying process.
Al-Madiheim reiterated that the Ministry is currently studying the feasibility of establishing an operational company to manage the fees, so that it would serve as the operational entity while the Ministry remains the legislative and regulatory authority for the real estate market.
Al-Mudehim confirmed that the Ministry has set a maximum penalty for non-payment at 2.5% of the land’s value, which is added to the fees due, bringing the total amount collected from the landowner to 5% in penalties, noting that the fee decision is binding on the landowner, and once the decision (invoice) is issued, it becomes effective and payment is mandatory, even if it requires the suspension of services to the landowner.
The advisor to the Minister of Housing explained to attendees at the informational session on the system held at the Riyadh Chamber of Commerce the day before yesterday, that the fees apply to developed land for which a final permit has been issued, confirming that they have identified 70,000 vacant plots in Riyadh—ranging from small plots not subject to the fees to large ones covered by the system—all of which are within the urban area.
