Within the framework of the Kingdom’s ongoing development journey, the White Land Fees System emerges as a strategic tool aimed at achieving balance in the real estate market. This system is not merely a financial measure, but rather an effective step to encourage landowners to develop their unused plots or release them to the market, thereby contributing to the increase of housing supply and the achievement of comprehensive urban development.
Understanding the Mechanism: From A to Z
An annual fee of up to 10% of the value of undeveloped land and 5% of the value of vacant properties is imposed. But what criteria define such land and properties?
• Undeveloped land (White Land): Plots within urban boundaries that are suitable for development. Fees apply if the area—or combined areas—amount to 5,000 square meters or more.
• Vacant properties: Buildings located within urban areas that remain unused for an extended period without valid justification, where such vacancy negatively affects the availability of sufficient supply in the real estate market.
The imposition of fees is determined based on precise factors, such as supply-demand gaps, real estate price inflation, and shortage of developed land. The valuation of land considers several elements, including location, topography, zoning regulations, and the availability of surrounding public services.
Owners’ Rights: Objection and Benefits
The system guarantees landowners’ rights, providing clear mechanisms to manage fees and benefit from available grace periods:
• Objection to fees: Owners may file a written objection against the decision to impose fees or the valuation of the land within 60 days of notification.
• Requesting a grace period for development: Owners may apply for an extension to pay and develop their land, provided that the request is submitted before the legal deadline and accompanied by evidence of development activity or a valid obstacle preventing development.
• Refund of fees: If an owner pays the fee but completes development within the same year, they may request a refund upon submission of proof of completion.
• Shared ownership properties: When multiple owners hold title to the same plot, each is responsible for paying the fee proportionate to their ownership share.
Procedures and Penalties
Owners are notified of imposed fees through channels specified by executive regulations, such as the electronic portal and text messages. The annual invoice is issued and must be settled within one year of issuance unless otherwise stated in the notification.
In cases of non-registration, late payment, or violation of rules and regulations, the violator is subject to a financial penalty not exceeding the due fee, in addition to being required to pay the original amount. Fee invoices are enforceable through the Enforcement System or the “Efaa” platform.
Where development obstacles exist beyond the owner’s control—such as endowment land—fees are not applied, provided the land is registered and supported by evidence of such impediments.
Cities Where Fees Are Applied
The system has been implemented in major cities, including: Riyadh, Diriyah, Makkah, Jeddah, Dammam, Khobar, Dhahran, Madinah, Taif, Jazan, Samtah, Abu Arish, Tabuk, Al-Ahsa, Buraidah, Unaizah, Hail, Abha, and Khamis Mushait.
A National Opportunity
This system represents an opportunity for every landowner to contribute to a broader national vision, transforming ownership from a mere plot of land into an active component of the Kingdom’s urban development journey.
To ensure your decisions are built on a sound legal foundation, we at “Asas For Legal Consultations” place our expertise at your service, guiding you through complex procedures and safeguarding your assets from unnecessary financial liabilities.