How will the white land tax system change Riyadh's urban landscape until 2030?

How will the white land tax system change Riyadh's urban landscape until 2030?

Several companies listed on the Saudi Stock Exchange have announced that they are subject to the new Implementing Regulations of the White Land Tax system. Dar Al Arkan Company, located within the geographical area of Riyadh subject to the White Land Tax, owns approximately 2.65 million square meters subject to a 5% tax rate. Riyadh Development Company also owns several plots of land in Al Rimal, Al Deera, and Al Malqa districts, all of which are subject to the updated regulations. This means that these companies, and others, will pay at least one million riyals annually. This represents an annual burden on companies, which will likely lead them to offer their undeveloped land for development or sale. This will change the urban landscape of Riyadh until 2030. In this article, we, the Abdulaziz bin Yasser Al-Anzi Law Firm and Legal Consultants, will explain the impact of this.

 Abdulaziz bin Yasser Al-Anzi Law Firm

Elements of the article

The real estate plan and Vision 2030

The main objectives of the real estate sector within Vision 2030.

How will the vacant land fees change Riyadh's urban landscape?

1- To accelerate development and land utilization:

2- Impact on urban density and vertical growth:

3- Improving quality of life and availability of services:

4- Supporting major projects and the city's future vision.

Questions and Answers:

What are the conditions under which undeveloped land is subject to fees?

How do I know which plot of land my land is located in?

How long does it take to pay the fee?

How can I appeal the white land fees?

What is the objection period?

What is the duration for filing an appeal?

Which court has jurisdiction to appeal decisions imposing fees on undeveloped land?

The real estate plan and Vision 2030

The real estate plan is based on "Saudi Vision 2030" and includes the following:

Improving land use efficiency within cities.

Enhancing the balance of supply and demand in the real estate market.

Transforming the real estate sector into one of the main drivers of non-oil economic growth.

The main objectives for the real estate sector within Vision 2030:

To raise the percentage of citizens owning homes to more than 70% by 2030, and for this reason, many programs were launched such as Sakani, subsidized financing and partnerships with the private sector.

Improving the quality of life in Saudi cities through the development of infrastructure, urban services, parks and public spaces.

Stimulating real estate investment by opening the door to foreign investments in real estate development, and updating regulatory systems such as the real estate registration system, the real estate brokerage system, and updating the legal regulations that govern the rental relationship.

Achieving balance in land prices is done through the white land fees system, which aims to combat monopolies and stimulate the development of unexploited land within the urban area.

How will the vacant land fees change Riyadh's urban landscape?

White land fees in Riyadh will significantly change the city's urban landscape by 2030 through several mechanisms:

1- To accelerate development and land utilization:

The fees aim to incentivize owners of undeveloped or partially developed land within urban areas to develop it or sell it to developers. This reduces the phenomenon of "land hoarding," which has been hindering organized urban expansion.

As land development increases, the supply of residential and commercial land increases, which may lead to stabilization or a decrease in land and property prices in the long term.

The fees force the utilization of land allocated in the city's structural plans, which supports directed development and reduces haphazardness.

2- Impact on urban density and vertical growth:

Instead of continuous horizontal expansion on the outskirts of the city, the fees encourage more efficient use of land within the existing urban area.

This may lead to increased population density in some areas and a trend towards multi-story buildings (vertical growth) to accommodate more residents and activities in a limited space.

With limited developed land and high value, developers may turn to projects that integrate housing, commerce and services in a single building or complex, creating more vibrant urban environments in Riyadh.

3- Improving quality of life and availability of services:

When land is developed within the urban area, it is easier for government agencies to provide infrastructure and basic services (schools, hospitals, parks and roads) more efficiently and economically, rather than extending them over long distances into undeveloped areas.

Compact urban growth and reduced horizontal sprawl may help reduce the need for long-distance travel, thereby alleviating traffic congestion and improving air quality.

By stimulating development in different areas, fees can contribute to a more equitable distribution of housing and investment opportunities throughout the city.

4- Supporting major projects and the city's future vision.

The revenue from white land fees goes towards funding infrastructure and public utility projects, supporting the sustainable development of the city and helping to achieve the goals of Saudi Vision 2030.

The fees contribute to promoting the principles of sustainability in urban planning, as they encourage the optimal use of resources and direct growth towards serviced areas.

Questions and Answers:

What are the conditions under which undeveloped land is subject to fees?

To be a white land.

To be expandable or buildable.

To fall within the scope of application of the fee, according to the announcement issued regarding it.

Its area, or the total area of white land owned by one owner and subject to application, within the city limits, shall not be less than five thousand square meters.

Its use must be within the uses listed in the decision.

How do I know which plot of land my land is located in?

It is necessary to hire a law firm and legal consultancy where we deal on behalf of our clients with the relevant authorities to determine the specific category of land and then to determine the applicable annual fee percentage.

How long does it take to pay the fee?

The period is one calendar year from the date of issuance of the fee invoice.

How can I appeal the white land fees?

You must submit an objection to the white land fees to the relevant committee at the Ministry of Housing within 60 days of being notified of the decision.

What is the objection period?

60 days from the date you are notified of the decision.

What is the duration for filing an appeal?

There is no time limit for appealing the decision.

Which court has jurisdiction to appeal decisions imposing fees on undeveloped land?

The Administrative Court, i.e., filing a grievance before the Board of Grievances.

In conclusion: By 2030, we expect to see Riyadh more focused in its growth, with an increase in population and urban density in the interior, a decrease in vacant land within the urban area, and the emergence of new or significantly developed neighborhoods. Existing areas will undergo renewal and development to accommodate population growth and economic activities, which may lead to the emergence of more vibrant and integrated sub-urban centers, reshaping the traditional image of a horizontally expanding city.

 Abdulaziz bin Yasser Al-Anzi Law FirmWe provide all the necessary consultations and support to understand the new system of fees for vacant land and real estate and its Implementing Regulations. If you wish to file a formal objection, Abdul Aziz's office is ready to support you.

Take action now to protect your investment. Contact usFor initial consultation.