Conditions for Applying the White Land Fee in Saudi Arabia: A Comprehensive Guide

The White Land Fee Law does not apply automatically to all land; it requires a decision by the competent minister once the conditions set out in the Law and its Implementing Regulations are met. The Law aims to combat land hoarding, increase real estate supply and stimulate urban development in line with Vision 2030. In this article Shehab Alsaleh Lawyers & Legal Advisors explains the responsible authority, the main conditions for applying the fee, the fee rates by priority, the exemptions, and how to deal with the fee to avoid penalties.

1. The Authority Responsible for Selecting Land Subject to the Fee

Article 2 of the Regulations provides that the urban boundary and land uses are determined solely on the basis of:

  • Urban boundary maps
  • Detailed plans issued by the competent authorities

The main responsible authority is the Ministry of Housing (now part of the Ministry of Municipalities and Housing).

By ministerial decision, the Ministry forms one or more technical committees to assess land value and set the periods required for development or construction. Each committee has at least three members, including valuers licensed by the Saudi Authority for Accredited Valuers (Taqeem); decisions are taken by majority, and membership lasts three renewable years.

2. Conditions for Subjecting a City and a Plot to the Annual Fee

Conditions for the City

Article 5 provides that a city becomes subject to the fee when any of the following criteria is met:

  1. A gap between supply and demand for developed land
  2. Inflation in property prices
  3. A shortage in the supply of developed land
  4. Hoarding of white land without development
  5. The proportion of white land within the urban boundary
  6. Urban development priorities

Conditions for the Plot

Article 7 sets out the following cumulative conditions:

  1. The land is white land (undeveloped or unbuilt)
  2. It is capable of development or construction
  3. It lies within the announced scope of application of the fee
  4. Its area (or the total area of the same owner’s land in the city) is at least 5,000 m²
  5. Its use falls within the uses specified in the ministerial decision

3. Fee Rates by Development Priority (Article 6(2))

Tier Annual fee rate Description and examples
Highest priority 10% City center, dense commercial areas, 100% complete infrastructure (e.g. King Fahd Road in Riyadh, Tahlia in Jeddah)
High priority 7.5% Fully developed upscale districts (Al-Malqa and Hittin in Riyadh; Al-Shati in Jeddah)
Medium priority 5% Areas of active urban expansion (Al-Narjis and Al-Arid in Riyadh)
Low priority 2.5% City outskirts with recently available basic services
Outside priorities 0% Remote areas, incomplete services, future strategic reserve

4. Cases Where the Fee Ceases to Apply (Article 8)

The fee ceases to apply when any of the following occurs:

  1. The conditions for application are no longer met
  2. There is a restriction on disposal not caused by the owner
  3. There is an obstacle preventing the issuance of permits not caused by the owner
  4. Development or construction is completed within the statutory period
  5. An additional period is granted by decision of the minister or the committee

How Can Shehab Alsaleh Law Firm Help You With the White Land Fee?

We provide specialized advice and comprehensive services to landowners and real estate developers:

  • Assessing whether your land is subject to the fee or eligible for exemption
  • Objecting to committee decisions or valuations
  • Drafting development and partnership agreements to avoid the fee
  • Representation before the Ministry, committees and courts
  • Following up procedures to obtain extensions or exemptions

To protect your real estate investment and avoid unjustified fees, contact us through our contact page.

For more official information:
Ministry of Municipalities and Housing –
Real Estate Development Fund