Why are land prices rising despite the existence of large undeveloped areas within cities? This question was one of the main motivations behind the implementation of the white land tax system in Saudi Arabia, in order to address the phenomenon of land monopolization and encourage landowners to develop or sell their land. With the implementation of the white land tax law, changes have occurred in the real estate market, affecting supply and investor behavior. 

In this article, we will discuss the amount of the white land fees and the most important changes that have affected the Saudi real estate market.

What is the white land fee system?

It is a system that imposes annual fees on undeveloped land and vacant properties within cities, with the aim of increasing the supply of residential land at affordable prices, achieving market balance, and preventing monopoly. This system was first implemented by royal decree in 2015, It was then developed in 2025 to include vacant properties as well, reflecting the Kingdom’s keenness to support the effective use of land. 

The Ministry of Municipal Affairs and Housing oversees the implementation of the system in all regions of the Kingdom, with the support of a ministerial committee that submits periodic reports to ensure that the objectives are achieved and to follow up on the implementation of policies that serve the real estate supply and the development of cities.

The most important motives for amending the system are:

Supply and demand: 

When supply is low and demand is high, prices rise excessively. Therefore, the system helps motivate owners to develop their land or offer it for sale, thereby contributing to an increase in supply and creating new opportunities for residential and commercial projects.

High percentage of undeveloped land within urban areas: 

An increase in undeveloped land leads to the dispersion of services and infrastructure and higher real estate development costs. The fees serve to direct development towards the effective use of these areas.

Shortage of developed land supply: 

When the amount of developed land available for sale is limited, the application of fees becomes justified to increase supply and prevent monopolization, thereby providing greater opportunities for developers.

Monopoly of vacant land and lack of development:

 The freezing of large tracts of land by some owners hinders development. Fees impose an annual cost on the monopoly, which incentivizes owners to either develop or sell.

Inflation in real estate prices:

 Excessive increases in land and housing prices make ownership difficult for citizens, so fees help increase supply and reduce pressure.

Urban development priorities: 

Fees are imposed according to each city’s strategic plans, with a focus on areas prioritized for residential or commercial development to ensure that development is aligned with actual needs.

In short, the white land fee system has helped regulate the real estate market and increase the supply of developed land. It has also limited monopolies and encouraged landowners to develop their land. The system remains an important tool for promoting sustainable urban development and achieving price balance in cities.

What are the most important changes to the white land fee system?

As mentioned, there have been changes to the white land fee system law in Saudi Arabia in 2025, the most important of which are:

• Payment deadline: Taxpayers are given one calendar year to pay the bill, with the possibility of requesting an extension for development.

• Division of cities into segments: Cities have been divided into five segments according to development priority, such as the city of Riyadh, to determine the value of fees for each area.

• Minimum area: The law covers land with an area or total area of 5,000 square meters or more owned by a single owner.

• Expansion of land scope: This includes commercial, agricultural, and industrial land within the urban area.

• Imposing fees on vacant properties: To encourage the effective use of unused land and buildings.

• Increasing annual fees: Imposing new fees on land and buildings that have been unused for a long time, which is a recent update that did not exist previously.
• Fee brackets:

• First bracket (central Riyadh): 10% per annum of the land value
• Other brackets: ranging between 7.5%, 5%, and 2.5% depending on priority and location.

The white land fee system is being implemented gradually in several stages, which are:

Stages of applying white land fees

• The fees are first applied to undeveloped land within the urban area, provided that the land area is 10,000 square meters or more.
• The next stage includes developed land owned by one person within a single plan, with an area of 10,000 square meters or more.
• After that, the fees are imposed on developed land with an area of 5,000 square meters or more within approved plans and owned by one person.
• In case of obstacles preventing development, the land may be exempted from fees, especially if it is developed or building permits are issued within one year of the announcement, according to the 2016 executive regulations.

We have thus clarified the fees for white land and the most important changes to the white land fee system, which have had a significant impact on the real estate market and encouraged land investment, increased real estate supply, and prevented monopolies, thereby supporting sustainable urban development.

In conclusion

The white land fee system is an important tool for regulating the Saudi real estate market and motivating owners to develop their land and increase supply. Real estate valuation also plays a fundamental and important role in supporting the success of this system, as it is used to accurately determine the value of land and identify the appropriate fee brackets, ensuring fairness in application and price stability.

To obtain an accredited real estate valuation that helps you accurately determine the value of land, you must hire an accredited real estate valuer. Contact now Aain valuation and get a real estate valuation that supports your investment decisions.

Frequently asked questions:

• What does white land mean?

White land is vacant land located within the urban area of cities, but it is undeveloped or unused, meaning it has not been built on or prepared for residential, commercial, or investment use. This land is often held without development, which reduces real estate supply and affects market balance.

• Who is responsible for white land fees?

The Ministry of Municipal Affairs and Housing is responsible for overseeing the implementation of the white land fee system in all regions of the Kingdom. Its tasks include determining the scope of application, issuing invoices, following up on payment compliance, and taking legal action against non-compliant parties, in accordance with the system’s executive regulations.

• What is the purpose of real estate valuation?

Real estate valuation aims to determine the fair market value of a property based on precise professional criteria, including location, size, condition, and market supply and demand. The valuation helps support sales and purchase decisions, determine the value of collateral when applying for financing, settle disputes, study investment feasibility, and estimate expected returns. Valuations are particularly important in the white land fee system, as the market value of the property is used to calculate fees and determine the appropriate bracket, ensuring fairness and transparency among owners.

• The best real estate valuation company in Saudi Arabia?

Aain valuation is one of the specialized companies that provides valuation services accredited according to the highest professional standards. The company has more than five years of experience and a team of accredited valuers. It also has the necessary accreditations from the Saudi Authority of accredited valuers and the Ministry of Commerce, in addition to membership in the Royal Institution of Chartered Surveyors (RICS). and the Ministry of Commerce, in addition to membership of the Royal Institution of Chartered Surveyors (RICS). Aain’s services include residential and commercial valuation, feasibility studies and market consulting, valuation of projects under construction and off-plan sales, as well as valuation for budget purposes in accordance with IFRS standards.