White Land Tax (WLT) in Saudi Arabia: 2.5% Fee on Urban Vacant Land — What Corporate Owners Need to Know

Overview: Purpose & Legal Basis

The White Land Tax is an annual fee intended to deter land hoarding and increase the supply of serviced plots for housing and mixed-use development. It historically applied at a flat 2.5% to the value of eligible vacant, developable lands within urban boundaries. The program is administered by the Ministry of Municipal, Rural Affairs and Housing (MoMRAH) through the White Lands/Idle Lands Program. :contentReference[oaicite:1]{index=1}

What Changed in 2025 (Rates & Scope)

In April–May 2025, the Council of Ministers approved amendments rebranding and expanding the regime (now covering white land and vacant property fees) and allowing the fee on undeveloped land to be set up to 10% (from the historic 2.5%), with a new fee on long-vacant built properties of up to 5% (potentially up to 10% subject to regulations and committee recommendations). Executive/implementing regulations define actual city-by-city rates and timing. :contentReference[oaicite:2]{index=2}

Practical read-through: If your city has not yet moved to the amended scale, plan using the historical 2.5% and model sensitivity cases up to 10% for budgets and board approvals. Track the city notices & waves closely. :contentReference[oaicite:3]{index=3}

Who Is in Scope (Cities, Phases, Thresholds)

The program rolls out by city and phase. Phase One historically targeted undeveloped plots ≥10,000 m² within designated urban boundaries; later phases can capture developed lands meeting area tests and owners whose aggregate holdings in a city cross specific thresholds (e.g., ≥10,000 m²) — enabling broader coverage and faster market impact. :contentReference[oaicite:4]{index=4}

MoMRAH can apply multiple phases within a single city and periodically adjust scope based on housing and planning needs. :contentReference[oaicite:5]{index=5}

How the 2.5% Fee Is Calculated (and Could Scale Up)

Under the original law, the fee is computed as 2.5% of the land’s assessed market value for the relevant year. With the 2025 amendments, the permitted rate for white land can be set up to 10% in the regulations; actual rates and any banding are confirmed when each city’s implementing decision is published. :contentReference[oaicite:6]{index=6}

Valuation and banding rules are detailed in MoMRAH’s regulations/decisions for the city and period. :contentReference[oaicite:7]{index=7}

Registration, Valuation & Invoices

1. Watch the city notice (when a phase is activated) and register the land on time; failures can trigger fines. :contentReference[oaicite:8]{index=8}
2. Submit supporting data (title, area, location, availability of services, development constraints) for valuation. :contentReference[oaicite:9]{index=9}
3. Receive invoice from the White Lands/Idle Lands Program and pay by the due date (cycles have been issued for major cities such as Riyadh/Jeddah). :contentReference[oaicite:10]{index=10}
4. If developing, file permits/plan evidence; partial development does not automatically exempt remaining vacant area. :contentReference[oaicite:11]{index=11}

Penalties, Objections & Appeals

• Non-compliance fines can reach up to the amount of the fee due (historically up to 100% of the fee cited in program communications). :contentReference[oaicite:12]{index=12}
• Objections/appeals are reviewed by designated committees; documentation and deadlines are critical. :contentReference[oaicite:13]{index=13}
• Banks/financiers are also required to ensure timely registration of encumbered lands. :contentReference[oaicite:14]{index=14}

Strategy: Reducing Exposure & Monetising Land

Market context: The policy aims to boost housing supply and curb speculation; MoMRAH communicates that reforms support market balance and efficient use of assets. :contentReference[oaicite:16]{index=16}

FAQ for Corporate Landholders

Is the rate always 2.5%?
Historically yes, but 2025 amendments allow rates up to 10% for white land and introduce a fee on vacant properties (up to 5%, potentially 10% per regulations). Check the executive regulations and city notices to confirm the applicable rate and phase. :contentReference[oaicite:17]{index=17}

Which plots are caught first?
Traditionally, undeveloped plots ≥10,000 m² in designated urban zones (Phase One), with later phases expanding by area and ownership aggregation. :contentReference[oaicite:18]{index=18}

What if I start partial development?
Partial work without permits or clear evidence typically won’t exempt remaining vacant areas; authorities expect tangible progress and documentation. :contentReference[oaicite:19]{index=19}

How will I know when to register and pay?
The program announces phases/cities and then issues invoices for each cycle; missing registration or deadlines can trigger fines. :contentReference[oaicite:20]{index=20}

SEO Takeaways for Corporate Readers

• White Land Tax Saudi Arabia 2.5% — annual fee on vacant, developable urban land to drive development. :contentReference[oaicite:21]{index=21}
• 2025 WLT amendments — potential rates up to 10%; new fee on vacant properties up to 5% (possible 10%). :contentReference[oaicite:22]{index=22}
• Scope & phases — Phase One ≥10,000 m²; later phases broaden coverage/aggregation by owner and city. :contentReference[oaicite:23]{index=23}
• Penalties — fines can reach up to the fee amount if you miss registration/payment windows. :contentReference[oaicite:24]{index=24}