Saudi Arabia introduces new land tax system to regulate real estate
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Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail on Wednesday revealed the geographic zones for applying white land fees in Riyadh. The move aims at regulating the property market and driving balanced urban growth under the directives of Crown Prince Mohammed bin Salman.
Al-Hogail said the new phase of the program will enable landowners and developers to unlock opportunities while contributing to the ministry’s objectives of boosting supply and stabilizing the real estate sector.
Under the framework, annual fees are levied on undeveloped lands according to a five-tier structure:
- Priority Zone 1: 10% of land value
- Priority Zone 2: 7.5% of land value
- Priority Zone 3: 5% of land value
- Priority Zone 4: 2.5% of land value
Outside priority areas are exempted from fees but included in an owner’s undeveloped land holdings within Riyadh
The regulations apply to all land uses within official urban boundaries, with a minimum qualifying size of 5,000 square meters, whether as a single parcel or as the combined holdings of one owner.
To ensure transparency and consistency, a specialized technical committee of licensed appraisers from the Saudi Authority for Accredited Valuers will assess land values and set development timelines. Committee terms will run for three years, with the option for renewal.
The ministry will also conduct annual reviews of land and housing availability, price trends, market activity and monopolistic practices. Based on these assessments, it may decide to expand, suspend or amend the fee program to align with the Kingdom’s urban development priorities.
