Amendments to the white land fees system to regulate the market and confront monopoly

In a move aimed at increasing the supply of developed lands and real estate units and achieving a balance between supply and demand in the real estate market, the Cabinet’s decision was issued to agree to amend the white land fees system to include vacant real estate.
During a real estate symposium held by “Today” this amendment comes within the target of Vision 2030 to organize the real estate sector, and after a directive from His Royal Highness Prince Muhammad bin Salman, the Prime Minister, to take the necessary regular measures to rush to issue the proposed amendments to the white land fee system.

System goals

The amended system aims to protect fair competition and combat the sector.
The regime defines the “white lands” as every land that is subject to development and development within the limits of the urban range, while “vacant real estate” is defined as buildings within the urban and and not used for a long time without an acceptable justification, which affects their lack of use or exploitation in providing sufficient supply in the real estate market.
According to the amendments, an annual fee will be imposed on white lands that are not more than 10% of the land value, according to controls determined by the regulations, on the lands owned by one or more people of the natural or legal character, with the exception of state properties.

Fees application

The Minister of Municipalities and Housing will issue decisions to determine the scope of the application of fees and the area of ​​land subject to application, provided that the area of ​​this land or the total land subject to application is not less less than five thousand square meters.
As for the vacant real estate, an annual fee will be imposed on it with a percentage of the proverb and no more than 5% of the value of the property, according to the provisions of the system and what is determined by the regulations, with the possibility of increasing this percentage to 10% by a decision of the Council of Ministers based on a proposal from the ministerial committee, and this does not include state real estate.

The proverbial fee

The “proverbial fee” is defined as an estimated value for the fee for renting a property similar to the residential property in terms of drawing in terms of location, space, use and constructional status in the same urban range.
Two regulations are scheduled to be released; A list of white lands will be announced within 90 days from the date of the deployment of the system amendments in the Official Gazette, and a list of vacant real estate will be issued within a year from the date of the publication of the system amendments in the Official Gazette.
Each list of technical standards, domain definition controls, evaluation mechanisms and organizational procedures related to application will include.

General controls

The general controls of white lands include setting the standards of lands subject to the application of drawing under the regulations, including the limits of the urban range, the minimum area, and the extent of the Earth’s ability to develop, taking into account the existence of obstacles that prevent the issuance of licenses or approvals needed to develop or build the land.
The owner of the land or his ruling is responsible for paying the drawing and the implications of the resulting drawings, which do not exceed the amount of drawing due.

Duration of vacancy

As for the vacant real estate, the regulations will determine the duration of the vacancy for which the property is subject to the fee, in addition to the controls of proving its condition, taking into account the existence of obstacles that affect the possibility of occupying the property.
The drawing will be calculated on the basis of the taxage fee, and the owner of the property or the like is responsible for paying the drawing and fines.

Specialized committee

The system allows the taxpayer or his ruling to object to the fee, while a specialized committee is formed to consider the objections, and it is permissible to grigs its decisions before the Administrative Court.
The regulations define the necessary controls to ensure the application of the fee fairly and prevent evading its payment, and the rules of collection procedures.
It is noteworthy that the white land fees system began its formal issuance in November 2015, and witnessed several amendments to its executive regulations in June 2016, October 2019, and April 2021, with the aim of enhancing the efficiency of the system and organizing the real estate sector.