An annual fee of up to 5% on vacant properties after 6 months of non-use

Adopted Ministry of Municipalities and Housing Executive regulationsfor vacant real estate fees, within a regulatory framework aimed at increasing the efficiency of use of real estate assets and enhancing balance in the market.

This comes by motivating owners of unused buildings to repurpose them and increasing the supply of residential and commercial units, which contributes to achieving a balance between supply and demand.

Vacant real estate fees

The Ministry explained that the application of fees will be on buildings Vacantlocated within geographical areas that are announced by decision of the Minister.

This comes based on market indicators and standards that include vacancy rates, levels of supply and demand, prices, and housing costs, provided that the target cities and areas and implementation mechanisms are determined when these standards are met.

Classification of Vacant Buildings

According to the executive regulations for vacant real estate fees, the building is classified as vacant if it is not used or Exploiting it for a period of up to 6 months, whether continuously or sporadically during the reference year.

The executive regulations for vacant real estate fees determine the uses of the buildings subject to the fee according to the regulatory plans or approved certificates of occupancy, while obliging the taxpayer, whether an individual or a legal entity, to pay the fees according to his percentage of ownership in the case of multiple owners.

Estimation of fees

The regulations stipulate that the assessment of the fee is based on the ideal rent for the building according to approved evaluation criteria, An annual fee not exceeding 5% of the value of the property shall be imposed, taking into account the average market and rental values of similar properties in the target range.

The Ministry confirmed that the regulations took into account cases in which it is not possible to occupy the building for reasons beyond the control of the taxpayer, in addition to cases related to issuing occupancy certificates or transferring ownership in accordance with approved regulatory documents, in a way that ensures fairness and flexibility of application.

Invoicing Mechanisms

The regulation included clear mechanisms for issuing invoices and notification. Taxpayers, giving them the right to object in accordance with statutory procedures, and setting a deadline for payment of up to 6 months from the date of issuance of the invoice.

The Ministry stated that the revenues from fees will be allocated to support housing projects, in a way that enhances urban development and increases the efficiency of utilization of land and real estate assets, within the goals of developing the real estate sector in Saudi Arabia.

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