The Minister of Municipalities and Housing, Majed bin Abdullah Alhakil, announced that the implementation of the revised system for white land fees in the capital Riyadh constitutes a pivotal step within a package of four strategic decisions approved by His Royal Highness Crown Prince Mohammed bin Salman last March, aimed at achieving real estate balance and sustainable growth, and addressing the challenges facing the residential and commercial sectors.
In an interview with “Arabia Business”, Hakil revealed that these decisions included lifting the suspension on some lands in the north of Riyadh, developing mechanisms for the relationship between the landlord and the tenant, in addition to providing new lands to citizens through the Riyadh City Royal Commission, along with adopting revised fees for white lands.
Increasing the real estate supply
The minister explained that the purpose of the fees is to increase the real estate supply and incentivize owners to develop their undeveloped land, which will contribute to correcting prices and curbing speculation and monopolization. He pointed out that the “artificial scarcity” caused by the storage of land previously led to a decline in urban development.
He explained that the new system relies on precise geographical scales, with graduated fees ranging from 2.5% to 10% starting to apply in January next year. He pointed out that lands with the highest priority will be subject to a 10 percent rate, compared to 7.5% for high priority, 5% for medium priority, and 2.5% for low priority, while lands outside the ranges are exempt from the fees.
In harmony with the 2030 Vision
Hakil emphasized that the recent decisions are in line with the objectives of the Kingdom’s Vision 2030, which positions Riyadh on the path to becoming one of the top ten economic cities in the world, especially since the capital accounts for 50% of the non-oil economy and is preparing to host major events such as Expo 2030 and the 2034 World Cup.
He added that the ministry is working through digital platforms such as “Etmam” to speed up the issuance of permits and the approval of plans, ensuring a fair, transparent, and stable market, calling on land owners with an area exceeding 5,000 square meters to register within 60 days through the electronic portal to avoid fines that could reach 100% of the fee amount.
More investment opportunities
Hakil pointed out that the decisions open the way for contractors, engineering offices, and chains of activities related to the sector, as the property provides for more than 60 economic activities, stressing that urban development and increasing the supply will support economic activity, unlike land monopolization that harms growth.
He emphasized that the revenue from fees will be entirely allocated to housing projects and increasing the housing supply, with an annual review of each city to ensure the effectiveness of the program and adjusting the fees based on changes in supply and demand.
Geographic ranges of white land fees
Last Wednesday, the Minister of Municipalities and Housing announced the geographical areas for the white land fees in Riyadh.
Minister Alhakil said in a tweet on the X platform that in accordance with the directives of His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, may Allah protect him, and the wise leadership's keenness on everything that benefits the citizen and the resident, we announce the geographical areas of the white land fees in Riyadh city, in a significant step to regulate the real estate market and stimulate balanced urban development.
He added that this phase enables owners and developers to capitalize on opportunities, and supports the ministry's goals of increasing the supply and achieving balance in the real estate sector.
The map of the geographical zones subject to the application of the white land fees in the city of Riyadh is as follows:
– The first tranche with the highest priority imposes an annual fee of 10% of the value of the land.
– The second tranche with high priority imposes an annual fee of 7.5% of the value of the land.
– The third priority tranche imposes an annual fee of 5% of the value of the land.
– The fourth tranche with low priority imposes an annual fee of 2.5% of the value of the land.
– The fifth tranche is not within the scope of priorities; it is not subject to annual fees, and is calculated as part of the total land owned by the owner within the city limits.
