Saudi White Lands & Vacant Properties Fees Law 2026: Calculation Rules & Title Transfer Conditions

In late August 2026, the Saudi Cabinet issued a regulatory decision published in early September 2026 prohibiting the notarization of any real estate disposition transferring ownership of lands subject to fees prior to electronically verifying the settlement of all outstanding financial dues registered against them. This measure complements the legislative framework established by Royal Decree No. (M/244) for the implementation of the White Lands and Vacant Properties Fees Law in Saudi Arabia under the supervision of the Ministry of Municipalities and Housing, which raised the annual fee ceiling on vacant lands up to 10% and introduced a fee of up to 5% on unutilized buildings.

In this analysis, we review the regulatory and financial rules governing the five geographic tiers, along with the criteria for calculating the 5,000-square-meter subject area threshold across all urban uses. We also illustrate with practical figures the valuation mechanism for built vacant properties after 6 months of non-utilization, and the due diligence obligations incumbent upon investors and developers when concluding sales transactions and title deed transfers (Ifragh).

Legislative Development of the White Lands and Vacant Properties Fees Law in Saudi Arabia

The regulatory framework for imposing real estate fees in the Kingdom shifted from a limited flat-rate phase to a dynamic pricing phase linked to urban development priorities. This framework was established pursuant to Royal Decree No. (M/244) issued on 7 Dhu al-Qi'dah 1446 AH, corresponding to May 5, 2025, based on Cabinet Decision No. (758) dated 1 Dhu al-Qi'dah 1446 AH, corresponding to April 29, 2025, published in the Um Al-Qura newspaper in Issue No. (5086) on May 12, 2025, which amended the official title to become the "White Lands and Vacant Properties Fees Law".

The Ministry of Municipalities and Housing, represented by the Minister of Municipalities and Housing, Majed bin Abdullah Al-Hogail, oversees the direct enforcement of the law, the issuance of its executive regulations, and the specification of targeted geographical zones within cities. The chronological sequence for the entry into force of these amendments followed specific legislative and executive milestones:

• Approval of the Comprehensive Regulatory Amendment (May 2025): The issuance of Royal Decree No. (M/244) expanding the scope of the law to encompass built vacant properties alongside vacant lands, granting pricing flexibility of up to 10% of asset value.
• Issuance of the Executive Regulations for White Lands Fees (August 22, 2025): The regulations were published on 28 Safar 1447 AH, including the reduction of the minimum subject area threshold to 5,000 square meters, the adoption of the five geographic tiers system, and the inclusion of all urban uses.
• Issuance of the First Unified Invoices in Riyadh (January 1, 2026): The actual financial implementation of the new tiers commenced in the capital, Riyadh, in early 2026 via the issuance of unified invoices to vacant land owners according to graduated rates.
• Issuance of the Executive Regulations for Vacant Properties Fees (May 15, 2026): Issued by Decision of the Minister of Municipalities and Housing No. (4700822503/1) dated 26 Dhu al-Qi'dah 1447 AH, corresponding to May 13, 2026, and published in the Um Al-Qura newspaper in Issue No. (5160) on May 15, 2026, to define structural vacancy criteria.
• Linking Title Deed Transfer (Ifragh) to Fee Settlement (September 2026): The Saudi Cabinet decision was issued in late August 2026 and published in early September 2026, prohibiting the notarization of ownership transfer for any land subject to the law prior to settling its outstanding invoices.

The following table illustrates the essential differences between the provisions of the previous law issued in 1437 AH (2015) and the updated law and executive regulations implemented in 2026:

Comparison Criterion	Previous Law (2015 - Pre-amendment)	Updated Law and Executive Regulations (2026)
Official Law Title	White Lands Fees Law	White Lands and Vacant Properties Fees Law
Covered Real Estate Assets	Vacant lands only	Vacant lands and built vacant properties
Minimum Subject Area Threshold	10,000 square meters and above	5,000 square meters and above (for a single plot or aggregate plots of the obligated party)
Annual Land Fee Rate	Flat rate of 2.5% of land value	5 graduated geographic tiers: 10%, 7.5%, 5%, 2.5%, and 0%
Subject Urban Uses	Residential and commercial-residential use only	All developable urban uses within urban boundaries
Built Vacant Properties Fee	Not applicable	A percentage of fair market rental value (Ajrat al-Mithl) capped at 5% of property value (raisable to 10%)
Condition for Ownership Transfer Notarization (Ifragh)	Was not conditioned on prior verification of payment	Notarization of ownership transfer is prohibited prior to verifying full settlement of all due fees

The enforcement of these urban zones intersects with new legislation regulating international capital inflow into the Saudi market; you can review the Foreign Property Ownership Map in Saudi Arabia 2026: How to Know Eligible Areas via Saudi Properties Portal to learn about the geographical distribution of areas available for foreign investment and how to evaluate their regulatory commitments.

Structuring of the Five Geographic Tiers and White Lands Calculation Guidelines

The Executive Regulations issued by the Ministry of Municipalities and Housing eliminated the flat fee percentage concept, replacing it with a spatial pricing model that divides targeted cities into five geographic tiers according to urban development priorities and the availability of utilities and services. According to official data from the White Lands and Vacant Properties Fees Program, these tiers are distributed as follows:

• Tier 1 (Maximum Priority Zone): Subject to an annual fee of 10% of the assessed land value, covering central and fully serviced locations that represent maximum priority for immediate development and bridging the urban fabric.
• Tier 2 (High Priority Zone): Subject to an annual fee of 7.5% of the land value, comprising neighborhoods and urban corridors with high readiness for construction and investment.
• Tier 3 (Medium Priority Zone): Calculated at an annual fee of 5% of the land value, covering medium-density areas within organized urban expansion directions.
• Tier 4 (Low Priority Zone): Subject to an annual fee of 2.5% of the land value, including lower-priority areas in the urban development timeline within the targeted boundary.
• Tier 5 (Outside Priority Scope): Bears a direct annual fee rate of 0%; however, its area remains subject to tracking and inclusion within the aggregate holdings of the obligated party within the city.

Subjecting obligated parties to the law in 2026 is based on the "5,000-square-meter rule"; the fee applies if the area of a single plot or the aggregate area of scattered plots owned by a single obligated party within the applicable scope reaches 5,000 square meters or more. The new amendments also removed previous sectoral exemptions, making all developable vacant land within urban boundaries subject to the law regardless of its designated use, whether residential, commercial, administrative, or industrial.

Investors must beware of the "Tier 5 (0%) Trap" when managing their real estate portfolios; exempting land in this tier from direct monetary fees does not mean excluding it from the owner's area aggregate. The regulations explicitly stipulate counting Tier 5 land area within the total white land areas owned by the obligated party within the city, which pushes their total land holdings over the 5,000-square-meter threshold and subjects their other lands in Tiers 1 through 4 to annual fees.

To ensure fair valuation and accurate tier classification, one or more technical committees consisting of no fewer than 3 experts are formed within the Ministry of Municipalities and Housing, with the requirement of including licensed valuers from the Saudi Authority for Accredited Valuers (Taqeem). This committee assesses the market value of lands and properties subject to the law and sets the timeframes required for their development.

Practical Calculation Example of Fee Assessment and Area Aggregation

To illustrate the financial impact of the area aggregation rule and Tier 5 inclusion, let us assume an investor owns two separate vacant plots within the urban boundary of Riyadh according to the following parameters:

• First Plot (Commercial Land): Located in Tier 1 (Maximum Priority - 10% fee rate), with an area of 3,000 square meters, assessed by the technical committee at a market value of 10,000,000 SAR.
• Second Plot (Warehouse/Industrial Land): Located in Tier 5 (Outside Priority Scope - 0% fee rate), with an area of 2,500 square meters, with an assessed market value of 4,000,000 SAR.

Looking at each plot individually, both fall below the statutory minimum threshold (5,000 square meters). However, the actual application of the regulations proceeds according to the following calculation steps:

Calculation Breakdown	Plot 1 (Tier 1)	Plot 2 (Tier 5)	Regulatory Portfolio Result
Total Area	3,000 sq m	2,500 sq m	5,500 sq m (exceeds the 5,000 sq m threshold)
Assessed Market Value	10,000,000 SAR	4,000,000 SAR	14,000,000 SAR
Designated Tier Fee Rate	10% annually	0% annually	Portfolio subjected to the law due to area aggregation
Annual Fee Due	1,000,000 SAR	0 SAR	Total Invoice: 1,000,000 SAR

This example shows how an investor owning 2,500 square meters of land in Tier 5 triggered statutory liability on their commercial land in Tier 1, generating an annual financial commitment of one million Saudi Riyals.

Executive Regulations for Vacant Properties Fees 2026: Time Standard and Fee Ceiling

The entry into force of the Executive Regulations for Vacant Properties Fees on May 15, 2026, pursuant to Decision of the Minister of Municipalities and Housing No. (4700822503/1), marked a fundamental shift aimed at addressing the withholding of completed units and buildings from the sales and rental markets. According to the Saudi Press Agency (SPA) and texts published in the Um Al-Qura newspaper, built property is subject to fees according to precise temporal and financial criteria:

• Statutory Vacancy Criterion (6 Months): A building is deemed vacant and subject to fees if proven unutilized or unoccupied for 6 months (consecutive or intermittent) during the "reference year" defined by the regulations as twelve months.
• Fee Calculation Basis (Fair Market Rental Value / Ajrat al-Mithl): The annual fee on vacant property is imposed as a percentage of the estimated annual fair market rental value, not exceeding a maximum cap of 5% of the total property value.
• Exceptional Authority to Raise Ceiling (Up to 10%): The law granted the Cabinet the authority to raise the vacant property fee cap up to 10% of property value, based on a proposal submitted by the competent ministerial committee according to market supply and demand dynamics.
• Valuation and Fair Rental Assessment: The technical committee formed within the Ministry of Municipalities and Housing, with the participation of accredited valuers from Taqeem, determines the market value of the vacant property and assesses the prevailing fair market rental value in the same geographic zone.

Imposing this fee reduces the economic feasibility of holding residential or commercial buildings vacant in anticipation of future capital appreciation, urging landlords to release their units into the rental market immediately to prevent yield erosion. To analyze the impact of these decisions on rental returns in the capital, you can review Riyadh Rent Freeze Decision: Eight-Month Analysis and Its Impact on Foreign Investor Yields After Opening Ownership to understand how rental cap regulations interact with vacancy fees.

Requirement of Fee Settlement for Title Deed Transfer Notarization and Property Conveyance (September 2026)

The Cabinet decision issued in late August 2026 and published in the Um Al-Qura newspaper in early September 2026 closed one of the primary regulatory loopholes previously facing fee collection, namely the trading of land burdened with unpaid invoices. This decision established a strict legal equation linking real estate transactions to financial compliance with the White Lands and Vacant Properties Fees Law in Saudi Arabia:

• Prohibition of Notarization Prior to Settlement: All relevant authorities and licensed notaries are prohibited from notarizing any real estate disposition transferring ownership of land subject to the law—such as sales, donations, or conveyance (Ifragh)—unless electronically verified that all accrued fees have been paid in full.
• Registration Obligation for the New Owner (30-Day Deadline): The regulations obligate every natural or legal person acquiring ownership of white land after the official registration deadline has expired to submit all documentation and data related to the land to the Ministry of Municipalities and Housing within a maximum period of 30 days from the ownership transfer date.
• Joint Liability and Financial Due Diligence: This electronic link prevents hidden financial liabilities from transferring to the new buyer, and precludes sham sales or intra-party transfers from serving as mechanisms to evade issued invoices.

This amendment requires investors and real estate development funds to update their due diligence procedures prior to signing preliminary purchase agreements or paying deposits. It has become essential to verify land regulatory records via the White Lands portal to ensure clearance from outstanding invoices or penalties that could obstruct final title conveyance. If you are planning a property acquisition, you can check Steps and Conditions for Foreign Property Ownership in Saudi Arabia to understand the legal and documentation requirements necessary to complete title deed transfers successfully.

Statutory Payment Deadlines, Objection Mechanisms, and Violator Penalties

The executive regulations defined clear timelines for fulfilling financial obligations or appealing assessments, differentiating payment periods between white lands and vacant built properties, and imposing deterrent penalties on non-compliant parties:

• White Lands Fee Payment Deadline: The statutory grace period for paying white lands fee invoices is one calendar year (12 months) starting from the invoice issuance date.
• Vacant Properties Fee Payment Deadline: The statutory grace period for paying vacant properties fee invoices is only 6 months from the invoice issuance date, reflecting the legislative intent to expedite the release of ready units into the market.
• Right of Objection and Statutory Deadline: Obligated parties, for both white land and vacant property invoices, have the right to file a formal reasoned objection before the competent committee within 60 days from the notification date of the fee decision or invoice.
• Penalties and Monetary Fines: Anyone violating the provisions of the law and its executive regulations (such as failing to register on time, submitting misleading data, or failing to pay) shall be penalized with a fine of up to 100% of the fee amount due on their land or vacant property, without prejudice to the obligation to pay the principal fee amount.

Practically, the executive regulations settled the debate regarding scenarios under which fee assessment halts on white land, correcting several common market misconceptions:

• Inadequacy of Fencing to Cancel the Fee: Constructing a perimeter fence around white land or similar actions is not considered urban development and does not halt the annual fee under any circumstances.
• Inadequacy of Paper Building Permits: Merely obtaining a building permit or municipal architectural plan approval without actual physical commencement and completion on the ground does not exempt the owner from the invoice.
• Full Completion Requirement to Halt the Fee: The regulations explicitly state that halting fee imposition requires either final completion of infrastructure development or "fully constructing structures on the land—excluding fencing and similar works—" within the statutory period granted to the obligated party.

Investment Perspective: How Do the New Fees Reshape Real Estate Supply?

The economic feasibility of holding raw land (land banking) in major Saudi cities fundamentally shifted following the implementation of the new tiers in 2026. Previously, a flat fee of 2.5% was easily absorbed by annual land price appreciation; today, imposing an annual fee of 10% in Tier 1 and 7.5% in Tier 2 means that holding undeveloped land for 5 years consumes between 37.5% and 50% of its capital value.

These elevated holding costs, paired with the prohibition of title deed transfer prior to settlement, drive major landowners toward three primary investment pathways:

• Entering Development Partnerships: Concluding joint venture agreements with real estate developers or real estate investment funds to transform land from a tax liability into an income-generating asset.
• Liquidation and Sale to Developers: Offering vacant land for sale at realistic market valuations to builders ready for immediate construction, explaining the growth in primary transactions across serviced urban zones.
• Efficient Operation of Existing Buildings: Shortening vacancy intervals through flexible rental pricing and long-term property management agreements to avoid falling under the 5% vacant property fee.

This dynamic directly translates into increased supply of developed land as well as ready residential and commercial units, curbing non-productive speculation in favor of real developmental investment. You can review Record Surge in Saudi Building Permits: Where Is the Real Estate Market Heading? to examine construction growth and how legislative updates have accelerated construction pace.

Contact the Skyline Holding team to obtain specialized real estate and legal consultation and help you make the most suitable investment decision.

Frequently Asked Questions

How are the five new white land fee tiers distributed and what is the percentage for each tier?

Geographical zones within targeted cities are classified according to urban development priorities into 5 tiers: Tier 1 (Maximum Priority) at 10% annually of land value, Tier 2 (High Priority) at 7.5%, Tier 3 (Medium Priority) at 5%, Tier 4 (Low Priority) at 2.5%, and Tier 5 (Outside Priority Scope) at 0%.

When is a building considered vacant under the new system and how are its fees calculated?

A building is considered vacant and subject to fees if proven unutilized or unoccupied for 6 months (consecutive or intermittent) during the twelve-month reference year. The annual fee is calculated as a percentage of the fair market rental value (Ajrat al-Mithl) not exceeding 5% of the property value, with the Cabinet holding the authority to raise it to 10%.

Can white land with an unpaid fee invoice be sold or transferred after the 2026 Cabinet decision?

No, this is not permitted; the Saudi Cabinet decision issued in late August 2026 and published in early September 2026 mandated that competent authorities must not notarize any property disposition transferring ownership of land subject to the law without prior electronic verification of full settlement of all due fees.

What is the status of Tier 5 (0%), and is it completely excluded from the owner's aggregate area?

Lands located in Tier 5 are not subject to direct monetary fees (0% rate); however, their area is statutorily counted within the total white land area owned by the obligated party within the city, which may elevate their total land holdings to the subject threshold (5,000 square meters or more) and consequently subject their lands in other tiers to fees.

What is the payment deadline for white lands and vacant properties invoices, and how long is the objection period?

The payment deadline for white lands fee invoices is one calendar year from the issuance date, whereas the payment deadline for vacant properties fee invoices is 6 months from the issuance date. In both cases, the obligated party has the right to file an objection within 60 days from the invoice notification date.

Does fencing white land or securing a building permit halt fee application in 2026?

No, building a perimeter fence around the land or merely issuing a building permit without actual physical construction and completion does not cancel the fee; executive regulations require either fully constructing structures on the land (excluding fencing and similar works) or completing infrastructure development to halt fee calculation.

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Grasping the precise amendments to the White Lands and Vacant Properties Fees Law in Saudi Arabia for 2026 is an essential pillar for protecting real estate capital from penalties and ensuring the soundness of ownership transfer procedures. Contact the Skyline Holding team to obtain specialized real estate and legal consultation and help you make the most suitable investment decision.