Saudi Arabia Raises White Land Tax to 10%

Saudi Arabia has enacted significant amendments to its White Land Tax Law, raising the annual levy on undeveloped land from 2.5% to 10% of its value. Additionally, the reforms introduce a new annual tax on long-vacant properties without justified use. These changes are part of the Kingdom's broader efforts to stimulate land development and increase housing availability.

The revised tax framework now applies to individual or combined landholdings of 5,000 square meters or more within designated urban zones. Previously limited to residential and commercial land, the scope has expanded to include any undeveloped land suitable for development.

For the first time, the law imposes an annual levy on long-vacant properties—defined as ready-to-use buildings within urban areas that have remained unoccupied without acceptable justification. These properties will face an annual tax of up to 5% of their estimated rental value.

Minister of Municipal, Rural Affairs and Housing, Majid Al-Hogail, stated that the amendments aim to stimulate the use of vacant properties and adjust fees on undeveloped and developed vacant lands within urban areas. The reforms are expected to enhance land use efficiency and stimulate the development of residential projects.

The government plans to issue executive regulations for the amended White Land Tax Law within 90 days, while rules governing vacant property taxation are expected within a year. These measures align with Saudi Arabia's Vision 2030 goals to increase homeownership and address real estate market imbalances.

Real estate experts anticipate that these reforms will encourage landowners to develop their properties, thereby increasing the availability of residential units and revitalizing urban development projects. The changes are also expected to curb speculative land hoarding and reduce unjustified land price inflation.