Saudi Ministry Approves Executive Regulations for Vacant Property Fees

RIYADH, Saudi Arabia – Saudi Arabia’s Ministry of Municipalities and Housing has approved the executive regulations for vacant property fees, introducing a new framework aimed at improving the use of real estate assets and supporting greater balance across the property market.

The regulations form part of wider efforts to enhance market efficiency by encouraging the use of vacant buildings and increasing the supply of residential and commercial units. The ministry said the initiative is aligned with the directives of Crown Prince and Prime Minister Mohammed bin Salman and is intended to support a more balanced relationship between supply and demand.

The fees will be applied according to specific criteria that assess market conditions in areas to be announced at a later stage. These criteria will include vacancy rates, supply and demand levels, property prices, and housing costs.

The ministry explained that the regulations are designed to encourage the activation of vacant buildings and help bring more residential and commercial units into use.

By targeting underutilised properties, the framework aims to reduce practices that may negatively affect market equilibrium and support more efficient use of existing real estate stock.

The ministry clarified that the fees will apply to vacant buildings located within geographical areas designated by ministerial decree. These areas will be selected based on market indicators and vacancy criteria, with the cities and locations subject to the regulations to be announced once the relevant conditions are met.

Under the regulations, a building will be considered vacant if it has not been used or occupied for six consecutive or non-consecutive months during the reference year.

The ministry said the permitted uses of buildings subject to the fee will be determined in accordance with approved zoning plans or occupancy certificates.

Property owners, whether individuals or legal entities, will be required to pay the fee in proportion to their ownership share in cases where a building has multiple owners.

The regulations state that the fee amount will be assessed based on the fair market rental value of the building, in line with approved valuation standards.

An annual fee of up to 5 percent of the property’s value may be imposed, taking into account the average market and rental values of comparable properties.

The ministry also confirmed that the regulations take into consideration circumstances where a building cannot be occupied due to factors beyond the taxpayer’s control. This includes cases related to the issuance of occupancy certificates or the transfer of ownership in accordance with approved legal documentation.

The regulations establish clear mechanisms for issuing invoices and notifying taxpayers, while preserving the right to appeal through approved procedures.

Taxpayers will be granted a payment period of up to six months from the invoice issuance date, supporting procedural transparency and fair implementation.

The ministry added that revenues generated from the fees will be allocated to support housing projects, contributing to urban development and improving the efficiency of land and real estate asset utilisation.

The approval of the executive regulations marks another step in Saudi Arabia’s broader real estate reform agenda, as the Kingdom continues to expand housing supply, improve market transparency, and encourage more productive use of property assets.