Saudi Arabia's White Land Tax Now Charges Up to 10%. Here Is How It Works.

Between 2.5% and 10% of assessed land value, every year. Saudi Arabia’s white land tax — the annual fee on undeveloped land inside a city’s urban boundary — abandoned its flat 2.5% rate for a four-band schedule when the amended implementing regulations appeared in the Official Gazette, Umm Al-Qura, on 22 August 2025 [S2] [S7]. The first invoices under the new bands went to more than 60,000 Riyadh landowners from 1 January 2026 [S4] [S12] [S16]. Liability begins at 5,000 square metres, counted across everything a single owner holds in the city, and the rate is set by the plot’s development-priority zone.

The instrument is Royal Decree No. M/244, with Council of Ministers Resolution No. 758, approved on 29 April 2025 and published on 12 May 2025 [S6] [S11]. It amends the 2015 law, quadruples the ceiling, and does what the original never did: extends the charge to buildings that stand empty. The law’s name changed with it, to the White Land and Vacant Property Fees Law [S1].

Two points are routinely got wrong. The tax is administered by the Ministry of Municipal and Rural Affairs and Housing (MOMAH) — not ZATCA, which collects the 5% Real Estate Transaction Tax, and not the Real Estate General Authority. And every riyal collected is earmarked for housing projects rather than the general budget [S1] [S12].

Last verified: 31 July 2026. This page is legal information, not legal advice.

What Is the White Land Tax in Saudi Arabia?

The white land tax is an annual charge on vacant, developable land inside an approved urban boundary, calculated as a percentage of the land’s assessed value and payable by the registered owner. Its purpose is not to raise revenue but to make land banking expensive enough to stop. Land that is developed, or that sits outside a designated priority zone, pays nothing.

“White land” — ard baida — is the Saudi term for a plot inside the city left empty. Before 2015 there was no holding cost on it, which made undeveloped urban land a near-perfect store of value.

The instrument and the dates

The amended law runs to fifteen articles; the implementing regulations that give it teeth run to sixteen and supersede everything issued under the 2016 decision [S1] [S9]. The order matters: the decree set a ceiling in May 2025, the regulations built the bands in August, the minister drew the map days later, and charging began on New Year’s Day 2026. Anything written before late August 2025 describes a ceiling with no structure underneath it.

How Much Is the White Land Tax? The Full Rate Table

Four bands, from 2.5% to 10%, set by zone rather than by owner. Most published coverage still gets this wrong because it was written against the pre-2025 flat rate. PwC’s Worldwide Tax Summaries entry for Saudi Arabia still described a flat 2.5% annual tax when checked on 31 July 2026 [S22].

All white land bands apply only to undeveloped land of 5,000 m² or more inside the designated urban boundary.

Sources: MOMAH implementing regulations [S2], KPMG [S7], CMS [S8], AlGhazzawi & Partners [S9], Argaam [S13].

Two features matter more than the headline number.

The rate attaches to the map, not the plot’s history. An owner who has held the same hectare for twenty years and one who bought last month pay the same rate in the same zone. Nothing in the published regulations escalates the charge with the duration of vacancy: the escalation is spatial, not temporal.

Tier 5 is not an exemption. Land outside the priority map pays nothing, but its area still counts toward the owner’s citywide total when testing the 5,000-square-metre threshold [S13]. An owner with 4,000 square metres inside a Tier 1 zone and 2,000 outside it crosses the threshold and pays on the 4,000.

A Worked Example: What a 10,000 m² Riyadh Plot Actually Costs

Assume a 10,000-square-metre undeveloped plot inside Riyadh’s urban boundary, assessed by the valuation committee at SAR3,000 per square metre — SAR30m ($8m). The value is an assumption stated for arithmetic; the rate table is not.

Assumes a static assessed value and no compounding. To rescale: the Tier 1 charge is SAR100,000 a year for every SAR1m of assessed value.

The arithmetic that changes behaviour is in the final column. At the top band, holding the plot undeveloped for five years costs half its value, and for ten years costs all of it. A landowner who previously faced a 2.5% drag — comfortably below Riyadh’s rate of land appreciation in most recent years — now faces a charge that exceeds any plausible expectation of capital growth. That is why the amendment is better read as a behavioural instrument than a tax.

The aggregation rule catches smaller owners

The 5,000-square-metre floor is not a per-plot test. It applies to a single plot or to the combined area of undeveloped land one owner holds inside the city [S2] [S8] [S13]. Three separate plots of 2,000 square metres each, in different districts of Riyadh, total 6,000 and bring all three into charge. Co-owners are liable in proportion to their shares [S9] [S15]. This provision is the one most likely to surprise families holding inherited land across several parcels, and it is why registration runs by deed number rather than by plot [S5].

Who Has to Pay the White Land Tax?

The registered owner pays, whatever their nationality. Liability follows the title deed, not the occupier: “the property owner is always the primary party responsible for paying” the fee or any fine, and tenants are never in charge [S9]. Where land is mortgaged, banks and finance companies have carried a registration obligation since the Saudi Central Bank’s Circular No. 381000089830 of 22 May 2017, because failure to register exposes the owner to penalties [S21].

Registration is the owner’s duty, not the ministry’s. Owners must register affected land on the electronic portal within the window announced for each phase; a new owner acquiring white land afterwards has 30 days from transfer [S7]. Missing the deadline is itself the offence. When MOMAH opened second-phase registration in June 2026 it stated the penalty plainly: up to 100% of the fee value, in addition to the fees due [S5].

Payment falls due within one calendar year of invoice for white land [S7] [S12], and within six months for the vacant-property fee [S15].

What is exempt

• Government-owned real estate is outside the charge entirely [S8].
• Land below the threshold, tested on the aggregated citywide holding.
• Land outside the priority zones pays 0%, though the area counts toward the threshold [S13].
• Land whose owner is legally prevented from disposing of it or obtaining a development permit, through no fault of their own [S2] [S8].
• Completed development stops the charge; minor outstanding works — CMS records “fencing and the like” — do not defeat it [S8].
• Extensions are available: the ministry may grant more development time given the nature and size of the land, on committee approval [S2] [S12].

Does the White Land Tax Apply to Vacant Buildings?

Yes — this is the most significant change in the 2025 amendment, and the part least covered in English. The original 2015 law reached only undeveloped land. The amended law reaches buildings that stand empty inside the urban boundary without acceptable justification [S6] [S15].

A property counts as vacant if it has been unused or unoccupied for six months or more during the reference year, consecutively or not [S15]. That definition does a great deal of work: it captures completed but unsold residential stock and finished commercial buildings held off the market, not merely derelict ones.

The charge is a percentage of estimated fair annual rental value, capped at 5% of the property’s value, with the Council of Ministers empowered to raise the ceiling to 10% [S6] [S9] [S15]. Owners pay in proportion to their shares. The regulation allows for buildings that cannot be occupied for reasons outside the owner’s control [S15].

Two things are not settled. The geographic zones have not been announced — they will be set by ministerial decision using vacancy rates, price levels, housing costs and supply-and-demand indicators, but no city had been designated as of 31 July 2026 [S15]. And the operative percentage of rental value has not been published, only the 5% ceiling. Until both appear, no owner of a vacant building has a calculable liability.

The timing is telling. The law gave the ministry one year from 12 May 2025 to issue this regulation [S6]; adoption was reported on 13 May 2026 [S15] — essentially the full statutory year.

Where Does the Tax Apply, and Who Designates the Zones?

The Minister of Municipal and Rural Affairs and Housing designates the zones by decision, city by city. The regulations require MOMAH to “periodically review the availability of units and land, their supply and circulation volumes, prices, and monopolistic practices in any city” before applying, adjusting or suspending the fee [S2]. Zones are instruments, not fixtures.

Riyadh went first. Minister Majid Al-Hogail published the capital’s five-zone map on 27 August 2025, saying the new phase “enables landowners and developers to seize opportunities, while supporting the ministry’s goals of boosting supply” [S13]. Only plots inside the official urban boundary map qualify, at 5,000 square metres or above; registration ran 60 days from the announcement, online only [S13] [S14]. Invoicing began on 1 January 2026, and more than 60,000 invoices went out in that first cycle [S4] [S16].

Phase two opened on 8 June 2026, covering Jeddah, Makkah and the Dammam metropolitan area [S5]. MOMAH’s notice describes that phase as applying to “developed land with an area of 10,000 m² or more” and gave owners five days to register, with fee enquiry by deed number. That figure sits above the statutory floor and appears to be a phase-specific registration trigger rather than an amendment to the law; the ministry’s English notice does not reconcile the two, and we flag it rather than resolve it. For market context, see Saudi Arabia’s real estate market and Riyadh.

How Is Land Value Assessed — and How Do You Object?

By a committee of licensed valuers, and objections run to 60 days. Assessed value is not the owner’s figure and not the purchase price. A technical committee of at least three valuers accredited by the Saudi Authority for Accredited Valuers determines fair value by majority vote, and sets the development timeline attached to the plot [S12]. The criteria are specified: location, permitted use, terrain, building codes, the availability and capacity of services and utilities, and prevailing uses in the locality [S8].

That last criterion cuts both ways: the state charges most where the state has already spent most. A plot with full utility provision is worth more and taxed more; one the municipality has not serviced is worth less and taxed less.

The invoice must state the property’s location and value, the rate applied and the owner’s right to object [S9]. Objections go in writing to the competent committee within 60 days of notification. The committee has 60 days to decide, and silence counts as rejection [S9] [S12]. Decisions are appealable to the Administrative Court. The violations committee that imposes penalties is separately constituted, with at least three members including a legal adviser and a technical expert [S9]; its sanctions do not relieve the owner of the underlying fee.

Does the White Land Tax Actually Work?

Partly, and not through the channel the policy claims. The fee has moved money into housing and registered a great deal of land, but the evidence that it has lowered housing costs is thin — and the government’s own subsequent actions suggest it did not think the supply-side tools were working fast enough.

The case for it is real. MOMAH says the first phase disbursed more than SAR2bn ($533m) of fee revenue into infrastructure for over 80 housing projects, enabled more than 185,000 Saudi families to obtain units or land, and brought roughly 500 million square metres into the register in Riyadh [S12]. An earlier ministerial account in December 2019 put collections at SAR1.8bn ($480m) across four cities [S23]. And the headline indicator has moved: Saudi home ownership rose from 47% in 2016 to 66.24% at the end of 2025 against the 70% target [S19].

The case against is that almost none of that is attributable to the land fee. The home-ownership climb has been carried overwhelmingly by demand-side subsidy — Sakani allocations, mortgage support through the Real Estate Development Fund, and the Housing Programme delivery machine — not by land released under threat of a 2.5% charge, as the 70% home-ownership gap analysis sets out.

Riyadh prices tell against a strong claim too. Residential prices in the capital rose 17.7% in 2022, 8.6% in 2023, 8.6% in 2024 and 2.9% in 2025 [S20], while transaction volumes fell about 31.4% across 2025 [S27]. GASTAT’s national real estate price index rose just 1.3% year on year in Q2 2026, but residential plots — the segment the fee targets — were up 6.3%, while commercial property fell 3.2% [S26]. Land remained the strongest part of a weak market in the first two quarters under the new bands.

The decisive evidence is what the government did next. On 25 September 2025, one month after the Riyadh zone map appeared and three months before the first invoice, a directive from Crown Prince Mohammed bin Salman produced a five-year freeze on rent increases across residential and commercial leases inside Riyadh’s urban boundary, approved by the Council of Ministers and enacted by royal decree [S17] [S18]. Rent was locked at the last registered Ejar contract value, with fines up to twelve months’ rent for breach [S17] [S18]. A government confident that a 10% holding charge would deliver supply quickly does not simultaneously impose a five-year price control. The two are complements, but the second is an admission about the speed of the first.

Market participants read the early effect as friction rather than release. Taimur Khan, head of MENA research at JLL, described the result as a “Mexican stand-off, with owners and buyers wrangling over prices”, expecting at least three months before land prices settled [S16]. Whether repricing converts into completions is a 2027 question. See also the Saudi mortgage market analysis and the housing challenge entry.

What the Tax Means for Foreign Buyers and Developers

The white land fee is nationality-blind, which is why it matters to foreign capital arriving under the new ownership regime. A non-Saudi who acquires land in a designated zone under the Law of Real Estate Ownership by Non-Saudis — in force since 22 January 2026, operable since 23 June 2026 — takes on the same holding cost as a Saudi owner if the plot is 5,000 square metres or more and sits in a priority zone. Stacked, the two regimes produce a cost profile no competing page sets out in one place:

Entry and exit cost roughly 7% combined in the four principal cities. The annual charge is what changes strategy: at the top band it exceeds the total transaction cost inside a single year of holding. Land banking as an investment thesis does not survive contact with a 10% annual charge, which is the intended result.

Two consequences follow. First, foreign investors underwriting Saudi land must check zone status under two separate maps that share no boundaries — REGA’s Geographic Zones Document, which says whether a non-Saudi may own at all, and MOMAH’s priority map, which says what holding it costs. The overlap has not been published, and we could not establish it. The ownership side is in the foreign property ownership zones map.

Second, the fee pushes foreign capital toward built product and development joint ventures rather than raw land — the routes in the real estate investment guide, the Saudi REITs market, foreign investment law and MISA licensing and company formation.

Why This Matters for Vision 2030

Housing is one of the few Vision 2030 priorities close to its target, and one of the few where the binding constraint is a domestic ownership pattern rather than capital or expertise. The housing priority has always had two levers: subsidise the buyer, or dislodge the land. Until 2025 the second was set too low to move anything — 2.5% a year against double-digit land appreciation is not a deterrent, it is a rounding error.

The 2025 amendment is the first time the state has priced idle urban land at a level that competes with the return on holding it, placing it alongside the Real Estate Transaction Tax and the non-Saudi ownership regime as the third leg of a deliberate repricing of Saudi land, all three arriving within eighteen months.

The fiscal dimension is small and intentionally so. Fee revenue is ring-fenced for housing projects rather than flowing to the treasury [S1] [S12] [S14], which explains why MOMAH rather than ZATCA administers it. A tax designed to raise money would be collected by the tax authority. This one is designed to stop being collected. Backdrop: Saudi Arabia’s urbanisation, housing programme progress and the housing priority tracker.

Risks, Contradictions and Open Questions

The 10% band’s actual coverage is unpublished. MOMAH has released Riyadh’s zone map but no English breakdown of how much land, or how many owners, fall into each tier. Sixty thousand invoices is a count of bills, not of hectares at 10%. Without that split, no one outside the ministry can size the policy.

The 5,000 versus 10,000 square metre discrepancy is unresolved. The statutory floor is 5,000 square metres; MOMAH’s June 2026 second-phase notice refers to “developed land with an area of 10,000 m² or more” [S5]. The likeliest reading is a phase-specific registration trigger, but the ministry’s English text does not say so.

No revenue figure exists for the new regime. The SAR2bn and SAR1.8bn totals both belong to the pre-amendment programme [S12] [S23]; nothing has been published for the 2026 cycle. Any page presenting them as the yield of the 10% rate is misreading them.

Nothing escalates with vacancy duration. A plot held empty for twenty years pays the same rate as one bought last quarter. If the aim is to punish hoarding specifically, that is a gap in the design.

The vacant-property fee is a law without a map. The regulation exists; the zones and the operative rental-value percentage do not. Reporting the charge as though it currently binds anyone would be wrong.

Data on effect is genuinely absent. No published series isolates land released, plots developed or units completed as a consequence of the fee. The first-phase claims are ministerial totals for the whole programme, not a counterfactual. We state the correlation and decline to assert causation.

Source retrieval and dating, disclosed. Cavendish Maxwell’s 2025 residential report and Saudi Gazette’s coverage both blocked automated retrieval on 31 July 2026; the transaction-volume figure comes from Cavendish Maxwell as rendered in search indexing. Argaam dates the Riyadh zone map to 27 August 2025 [S13], Asharq Al-Awsat to 28 August [S14]; we use 27 August.

What to Watch Next

• The vacant-property zone decision. The first ministerial designation will show whether the charge is aimed at unsold residential stock, empty commercial towers, or both. No date announced.
• Invoicing in Jeddah, Makkah and Dammam. Registration closed in mid-June 2026; phase-two invoices test whether the rollout keeps its pace.
• GASTAT’s real estate price index for Q3 2026, due around late October. The residential plot series is the line that matters.
• Any published tier breakdown. A statement of how much Riyadh land sits at 10% would convert this from a policy story into a measurable one.
• Whether the Riyadh rent freeze is extended or copied. A second city adopting the five-year cap would indicate the supply-side instruments are still not delivering.
• First Administrative Court appeals on valuation. With 60,000 invoices and a 60-day objection window, the first decisions will define how contestable assessed values are.

Related Vision 2030 Context

• The law on foreigners buying property in Saudi Arabia — the ownership regime this fee sits on top of
• Saudi foreign property ownership zones, mapped — where non-Saudis may buy
• Saudi tax system: VAT, zakat and RETT — the surrounding tax framework
• The 70% home-ownership gap — what is left to close
• Housing priority under Vision 2030 — the policy stack
• How to invest in Saudi real estate — investor entry points
• Saudi real estate developers — who builds once land moves
• GCC housing benchmark — the Kingdom against Dubai and Doha

Sources

• [S1] Ministry of Municipal and Rural Affairs and Housing (MOMAH), MOMAH: White Land and Vacant Property Fees Law Contributes to Increasing Real Estate Supply, ministry statement, 2025. https://momah.gov.sa/en/node/14971
• [S2] Ministry of Municipal and Rural Affairs and Housing (MOMAH), Implementing Regulations of the White Land Fees Law With Annual Fees of Up to 10%, ministry statement, 24 August 2025. https://momah.gov.sa/en/node/15048
• [S3] Ministry of Municipal and Rural Affairs and Housing (MOMAH), MOMAH Launches the Updated Draft Implementing Regulations of the Law of White Land Tax on Istitlaa Platform, ministry statement, 13 July 2025. https://momah.gov.sa/en/node/15016
• [S4] Ministry of Municipal and Rural Affairs and Housing (MOMAH), The First Invoice for White Land Fees in Riyadh Will Be Issued Starting From January 1, 2026, ministry statement, 2025. https://momah.gov.sa/en/node/16264
• [S5] Ministry of Municipal and Rural Affairs and Housing (MOMAH), White Lands: 5 Days Until the Deadline, second-phase registration notice for Jeddah, Makkah and the Dammam metropolitan area, 8 June 2026. https://momah.gov.sa/en/news/white-lands-5-days-until
• [S6] King & Spalding, Saudi Arabia Overhauls White Land Fee Law: Key Changes Explained, client alert, 2025. https://www.kslaw.com/news-and-insights/saudi-arabia-overhauls-white-land-fee-law-key-changes-explained
• [S7] KPMG Saudi Arabia, Tax Flash: Publication of Implementing Regulations for White Land Tax, tax alert, September 2025. https://kpmg.com/sa/en/insights/tax-insights/tax-flash-publication-of-implementing-regulations-for-white-land-tax.html
• [S8] CMS, White Land Tax in Saudi Arabia: Rules, Rates and Liability, legal update, 2025. https://cms.law/en/sau/legal-updates/white-land-tax-in-saudi-arabia
• [S9] AlGhazzawi & Partners, White Land Tax Regime, legal insight, 2025. https://www.ghazzawilawfirm.com/insights/white-land-tax-regime/
• [S10] Grant Thornton Saudi Arabia, Issuance of the Implementing Regulations for the White Land Fees (1447H – 2025), advisory note, 2025. https://www.grantthornton.sa/en/insights/articles-and-publications/issuance_of_the_implementing_regulations_for_the_white_land_fees_1447H_2025/
• [S11] Arab News, Saudi Arabia Raises Undeveloped Land Tax to 10%, Expands Scope to Vacant Properties, news report, 2025. https://www.arabnews.com/node/2599032/business-economy
• [S12] Arab News, Saudi Arabia Launches White Land Fees in Riyadh to Boost Urban Development, news report, 2026. https://www.arabnews.com/node/2627344/business-economy
• [S13] Argaam, Saudi Housing Minister Sets White Land Fee Zones in Riyadh, news report, 27 August 2025. https://www.argaam.com/en/article/articledetail/id/1839273
• [S14] Asharq Al-Awsat, Saudi Arabia Launches Geographical Zones for White Land Fees to Regulate Riyadh’s Real Estate Market, news report, 28 August 2025. https://english.aawsat.com/business/5180015-saudi-arabia-launches-geographical-zones-white-land-fees-regulate-riyadh%E2%80%99s-real
• [S15] Asharq Al-Awsat, Saudi Vacant Properties Face Fees as Market Awaits Supply Increase, news report, 13 May 2026. https://english.aawsat.com/business/5272819-saudi-vacant-properties-face-fees-market-awaits-supply-increase
• [S16] AGBI, Saudi Arabia Bills 60,000 Landowners Under New Tax Rule, news report, 2 January 2026. https://www.agbi.com/real-estate/2026/01/saudi-arabia-bills-60000-landowners-under-new-tax-rule/
• [S17] Real Estate General Authority (REGA), Approval of Regulatory Provisions Governing the Relationship Between Landlords and Tenants in Riyadh, regulator announcement, 25 September 2025. https://rega.gov.sa/en/media-center/news/in-line-with-hrh-crown-prince-s-directive-to-take-several-measures-to-achieve-balance-in-the-real-estate-sector-in-riyadh-approval-has-been-issued-for-regulatory-provisions-aimed-at-regulating-the-relationship-between-landlords-and-tenants/
• [S18] MEED, Saudi Crown Prince Announces Riyadh Rent Freeze, news report, September 2025. https://www.meed.com/saudi-crown-prince-announces-riyadh-rent-freeze
• [S19] Zawya, Saudi Homeownership Rises to 66% as Kingdom Advances Sustainable Urban Development, news report, 2026. https://www.zawya.com/en/economy/saudi-homeownership-rises-to-66-as-kingdom-advances-sustainable-urban-development-401160
• [S20] Global Property Guide, Saudi Arabia’s Residential Property Market Analysis 2026, market analysis, 2026. https://www.globalpropertyguide.com/middle-east/saudi-arabia/price-history
• [S21] Saudi Central Bank (SAMA), Registration of Lands Subject to the White Land Fees Law Within the Specified Period, Circular No. 381000089830, 22 May 2017. https://rulebook.sama.gov.sa/en/registration-lands-subject-white-land-fees-law-within-specified-period
• [S22] PwC, Saudi Arabia — Individual — Other Taxes, Worldwide Tax Summaries, accessed 31 July 2026. https://taxsummaries.pwc.com/saudi-arabia/individual/other-taxes
• [S23] Argaam, Saudi Arabia Pumps SAR1.8bn White Land Fees Into Housing Projects, Says Al-Hogail, news report, 24 December 2019. https://www.argaam.com/en/article/articledetail/id/1337364
• [S24] Ministry of Municipal and Rural Affairs and Housing (MOMAH), Law of White Land Tax, Royal Decree No. M/4, 24 November 2015, official text. https://momah.gov.sa/sites/default/files/2022-02/Law%20of%20White%20Land%20Tax.pdf
• [S25] Lexis Middle East, Saudi Arabia Royal Decree No. 4/1437 on the Approval of the Law of Fees on Undeveloped Lands in Urban Areas, legal database entry. https://www.lexismiddleeast.com/law/SaudiArabia/RoyalDecree_4_1437/en/index.html
• [S26] Arab News, Saudi Home Prices Lift Real Estate Index 1.3% in Q2: GASTAT, news report, 20 July 2026. https://www.arabnews.com/node/2651585/business-economy
• [S27] Cavendish Maxwell, Saudi Arabia Residential Market Performance 2025, market report, 2026. https://cavendishmaxwell.com/insights/market-reports/residential/saudi-arabia-residential-market-performance-2025