1 June 2025 • 2 minute read
Saudi Arabia amends White Land Levy Law
Background
On 29 April 2025, the Saudi Arabian Cabinet approved significant amendments to the White Land Levy Law (the Law), marking the most substantial overhaul since its introduction in 2016. The White Land Levy was originally introduced to discourage land hoarding and promote urban development and is administered by Saudi Arabia’s Ministry of Municipalities and Housing.
The revised Law aligns with Saudi Arabia’s reform plans of encouraging the productive use of land and addressing housing supply challenges in key urban areas. The amendments to the Law were published in the official gazette on 12 May 2025.
Key Changes
- Increased Rate: The annual levy on undeveloped land has been raised to up to 10% (from a flat 2.5%) based on criteria to be determined by the Implementing Regulations to the Law.
- Expanded Scope: The Law now applies not only to undeveloped land but also to long-vacant developed properties within urban areas that remain unused without valid justification. These properties will be subject to a levy of up to 5% of their estimated rental value. The name of the Law has been changed to "White Land and Vacant Properties" to reflect the extended scope.
- Revised Land Size Threshold: The levy will apply to land holdings of 5,000 square meters or more.
Implementing Regulations
The revised Law leaves important areas to be clarified by the Implementing Regulations such as, crucially, the criteria for determining the higher rates applicable to land. Further, the Implementing Regulations are expected to clarify the reporting obligations and timelines for landowners subject to the Law.
It is understood that the Implementing Regulations to the revised Law for white land will be issued within 90 days and those for vacant properties will be issued within a year.
Conclusion
Landowners, developers and real estate investors should assess their land and property portfolios to determine their exposure under the revised Law and seek advice if they are uncertain about the implications.