Saudi Arabia sets new land fee zones in Riyadh to balance property market

Riyadh, Saudi Arabia - August 28, 2025 - Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail on Wednesday announced the geographic zones for white land fees in Riyadh, marking a major step toward regulating the property market and encouraging balanced urban development. The initiative aligns with directives from Crown Prince Mohammed bin Salman to enhance supply and achieve equilibrium across the housing sector.

A Tiered Framework for Land Fees

Al-Hogail explained that the new phase of the program allows landowners and developers to capitalize on opportunities while supporting the ministry’s long-term goals for housing supply.

Under the framework, annual fees on undeveloped lands will be imposed according to five tiers:

• 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: Exempted from fees but included within the owner’s total undeveloped land holdings in Riyadh

The ministry confirmed that the regulations apply to all land uses under the five-tier system, with eligibility limited to plots listed in official urban boundary maps. The minimum qualifying size is 5,000 square meters, either as a single plot or cumulative holdings of one owner in the city.

Technical Oversight and Enforcement

To ensure accurate valuations and timelines, a specialized technical committee will be formed, consisting of licensed appraisers from the Saudi Authority for Accredited Valuers. Committee members will serve renewable three-year terms and will be responsible for assessing land values and establishing development schedules.

The ministry also has a mandate to conduct annual reviews of land availability, housing supply, market activity, prices, and monopolistic practices in each city. Based on these findings, it may adjust, suspend, or expand the scope of the white land fee program to better align with urban development priorities.

Toward Balanced Development

By introducing the new fee zones, the program aims to discourage land hoarding, release undeveloped plots into the market, and support Saudi Arabia’s broader real estate strategy. Al-Hogail emphasized that the policy is a crucial tool to encourage investment while ensuring the capital’s urban expansion follows a more balanced, sustainable trajectory.