Executive Key Takeaways
- •The white land fee rose from a flat 2.5% to a tiered rate of up to 10%
- •Scope now covers all developable vacant land inside urban boundaries, not just residential
- •A separate annual fee of up to 5% of rental value applies to vacant buildings
- •Riyadh’s first 2026 cycle issued more than 60,000 invoices
What Changed
The amended White Land and Vacant Properties Fees Law was published in the Official Gazette in May 2025 under Royal Decree M/244. Two changes matter most. The ceiling rose from a flat 2.5% of assessed land value to as much as 10%. And the scope widened: the law now reaches all vacant land capable of development inside urban development boundaries, so commercial and industrial plots can fall within it, where the previous law covered only residential and mixed-use land.
The Rate Depends on Where the Land Is
The implementing regulations replaced the single rate with tiers set by zone priority: 10% in first-priority zones, 7.5% in second, 5% in third, 2.5% in fourth, and 0% outside designated zones. Rates take into account factors such as the land’s size, location, development potential and how long it has sat idle. Zones are designated by ministerial decision city by city, so the applicable rate is a function of the specific plot rather than a national figure. Collected fees are directed to a dedicated account at the Saudi Central Bank for housing projects.
Riyadh’s First Billing Cycle
Riyadh ran the first cycle under the new rules in 2026, issuing invoices to more than 60,000 landowners, with the charge applying to plots above 5,000 square metres. Owners have 60 days to appeal an invoice. They must then either pay or begin development within a year, with penalties reaching up to twice the original amount for non-compliance — though grace periods are available where an owner demonstrates serious commitment to developing the land.
The New Fee on Vacant Buildings
Separately, buildings left unused now carry their own annual fee of up to 5% of estimated rental value, which the Council of Ministers may raise to 10% on the recommendation of the ministerial committee. A property counts as vacant when it has gone unused for six months of the reference year, whether continuously or intermittently, and the rule covers both residential and commercial buildings. Implementation is being targeted first at cities and areas with high vacancy or supply-demand pressure, with specific locations announced based on indicators monitored by the authorities.
What This Changes for Investors
Undeveloped land used to cost nothing to hold beyond opportunity cost. It now carries an annual charge that can reach a tenth of its assessed value, which compresses the arithmetic of buying and waiting: appreciation must outrun the fee before it outruns anything else. The same logic now extends to built property left empty. For investors, the question shifts from whether an asset will appreciate to whether it will appreciate faster than the cost of holding it idle.
What Owners Should Do Now
Check whether your plot falls inside a designated zone and which priority tier applies, since the rate moves between 0% and 10% on location alone. Register through the ministry’s electronic portal where required. Watch for your city’s zone designations if it hasn’t been covered yet. If you receive an invoice you believe is wrong, the appeal window is 60 days — short enough that it closes while owners are still gathering documents. And if a property is sitting empty, treat the vacancy itself as a cost line rather than a neutral state.
“Holding land used to cost nothing but patience. Now it has a price, and the price rises with the location.”
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