Urgent: 5 controls to subject vacant property to a fee and stop it…and wait at least 12 months before applying

Geographic scope criteria

The regulation specified a set of indicators upon which decisions to subject geographical zones within cities to the application of the fee are based, the most prominent of which is the high rate of vacant properties within the zone, the high housing costs compared to the annual family income, in addition to the high real estate prices compared to the consumer price index.

The standards included high vacancy rates among those who own more than one vacant property within the same zone, with the Ministry of Municipalities and Housing responsible for determining the technical details of these. The standards are in accordance with approved controls commensurate with the nature of the property and its use.

The regulations confirm that the Ministry is assessing the extent to which these standards are met based on the approved technical data, with the obligation to continue follow-up for a period of not less than 12 continuous months, and if the indicators continue to be achieved during this period, an official announcement will be issued applying the fee to the specified scope.

5 basic conditions for subjecting vacant property to the fee

The executive regulations set a number of direct requirements that cannot be Applying the fee to vacant real estate without realizing it, the most prominent of which is that the building does not meet the minimum consumption of utilities and services allocated to its type of use, provided that this limit is determined by a decision of the competent minister.

The regulations stipulate that the building be located within a geographical area subject to the application of the fee according to an official announcement, and that it be capable of occupancy or obtain an occupancy certificate according to the type of use and location of the property.

Among the requirements are also that the use of the building be among the uses included in the regulatory decision, in addition to the number of properties not being less than The vacant property owned by the taxpayer within the scope of application is lower than the minimum specified by the decision.

Stopping the fee… specific cases and precise controls

On the other hand, the regulations specify clear cases in which the application of the fee is stopped on vacant property, the most prominent of which is the absence of any of the stipulated conditions for applying the fee, or the presence of an obstacle that prevents the occupancy of the building, provided that the taxpayer is not a direct cause or participant in this obstacle.

It stipulates that the transfer of ownership of the building is through sale, according to a document Regular, it is one of the reasons for stopping the fee, in addition to issuing an occupancy certificate for the building during the reference year, with the exception of cases in which the electricity was completely switched off before issuing the certificate.

The regulations also made it possible to stop the fee if the vacancy was the result of urgent and considered reasons, provided that the building is registered as the taxpayer’s main address, and the supporting documents proving this are submitted.

Technical Committee for Estimating the Average Rent and Value of Buildings

In the context of the technical organization for calculating the fee, the regulations stipulate: One or more committees shall be formed within the Ministry by a decision of the Minister, which shall estimate the average rent and the value of the buildings subject to the fee, provided that the number of its members shall not be less than three, and that it shall include specialists in real estate evaluation, including evaluators licensed by the Saudi Authority for Accredited Valuers.

The committee’s decisions shall be issued by a majority, and the term of membership shall be three years, subject to renewal, while the evaluation mechanism shall be determined according to approved criteria that include the average market prices of similar properties, the average rents within the urban area, and in the event that the evaluation is not possible due to lack of A similar property, based on the value of the land according to use and location.

Mandatory obligations on owners and annual disclosure

The regulations obligated owners of subject properties to disclose the condition of their buildings and submit the required documents and data, in addition to disclosure at least once a year during the reference year, while giving the Ministry the right to request additional data or conduct field inspections to verify the state of occupancy or the reasons for vacancy.

Geographic scopes and annual fees not to exceed 5%

The regulation clarifies that the Minister determines the geographical areas subject to the fee within each city, so that the annual fee is calculated as a percentage of the typical rent, not exceeding 5% of the value of the building, while specifying the uses covered and the property boundaries to which the fee applies.

It stipulates an annual review of real estate market indicators within cities, including occupancy rates, supply, trading, and typical rent, with the aim of assessing the continued need to apply or modify the fee within any scope.

Controls Strict to prevent evasion and unify application

The regulation stressed a set of supervisory measures to ensure fairness in application and prevent evasion, including unifying evaluation standards between cities, verifying the validity of the data provided, and coordination with relevant authorities.

It authorized the calculation of the fee for previous years as of the date the property was subject to the decision, without this affecting the imposition of any statutory fines related to non-payment or non-submission of documents.

Financial obligations and specific payment dates

It indicated The regulations stipulate that the taxpayer is obligated to pay the fee and any resulting fines within six months from the date of notification of the invoice, and if invoices are issued for previous years, payment shall be made within 90 days from the date of notification.

It confirmed the obligation to pay the fee according to the percentage of ownership in the event of multiple owners, whether they are individuals or legal entities, in a way that ensures a fair distribution of the financial obligation according to the statutory shares of each party.