Saudi Arabia is taking a hard line against landowners who keep their plots idle, introducing a stringent new draft regulation with significant penalties. The Ministry of Municipalities and Housing (MOMAH) has unveiled a detailed list of violations and fines under the White Land and Vacant Properties Fees system, aiming to transform the kingdom's urban landscape.
Complying or Paying: The New Rules for Landowners
The ministry's message is unequivocal: land within city limits is not for passive hoarding. The draft regulation, now open for public feedback on the Istitlaa platform until January 11, 2026, is designed to compel development. Officials state the goal is to increase compliance, improve fee efficiency, and crucially, boost the supply of developed land and housing units to balance market demand and combat monopolistic practices.
This policy directly targets plots of 5,000 square meters or larger within specified urban development zones. Fees are calculated as a percentage of the land's assessed value, applying pressure based on location priority. For instance, in Riyadh, the highest-priority zones face an annual fee of 10% of the land value, scaling down to 7.5% for high, 5% for medium, and 2.5% for lower priority areas. Land outside classified zones is exempt.
How the Penalty System Will Work
The proposed penalties framework establishes clear consequences for non-compliance. While the exact fine amounts in the new draft are not specified, the structure is based on previous rules. The draft outlines fines for:
- Late submission or absence of required paperwork.
- Failure to register land before the authorities issue an invoice.
- Extended delays in starting or completing development beyond approved deadlines.
Authorities emphasize that the system includes provisions for fairness. Landowners can request extensions for development or appeal against invoices, with committees mandated to respond within fixed timeframes. The core objective is not punitive but to encourage the productive and timely use of urban land, thereby alleviating pressure on housing and infrastructure.
A Strategic Move to Reshape Cities
This regulatory push is a strategic response to urban housing shortages and land speculation. By making it financially burdensome to hold undeveloped land, the government aims to unlock vast tracts for construction. The expected outcome is a significant increase in the availability of residential and commercial spaces, fostering more vibrant neighborhoods.
With the public consultation window open for an extended period until early 2026, the government is actively seeking input from stakeholders, including landowners and real estate market participants. Once finalized, the full implementation of this system is poised to fundamentally reshape land use in Saudi cities, turning vacant plots into homes, shops, and community hubs.
