Al Ramz Real Estate Company, a prominent player in the Saudi real estate sector, announced that it has received 94 invoices related to vacant land fees, totaling SAR 35.3 million. In an official statement published on the Saudi Stock Exchange (Tadawul), the company clarified that these invoices pertain to its land holdings located within the geographical area designated for the application of the fees in Riyadh.
General context of the White Land Fees Program
This measure comes as part of the implementation of the vacant land tax system, which Saudi Arabia approved in 2016 as one of the key initiatives of Vision 2030 aimed at reforming the real estate sector and addressing housing challenges. The program primarily aims to increase the supply of developed land suitable for construction, curb monopolistic practices and the hoarding of undeveloped land, thereby contributing to a balance between supply and demand and helping to stabilize real estate prices and make them more affordable for citizens.
The system imposes an annual fee of 2.5% of the estimated land value on undeveloped land, whether designated for residential or mixed-use (residential and commercial), located within the urban boundaries of the cities where the system is implemented. The program was rolled out in phases, starting with major cities such as Riyadh, Jeddah, and Dammam, before expanding to include other cities.
The importance of the event and its expected impact
This announcement reflects the direct impact of government policies on major real estate developers. By imposing these fees, companies like Al Ramz are incentivized to accelerate the development of their real estate projects instead of leaving land as long-term investment assets. The company confirmed in its statement that all of this land is linked to projects under development and that it is currently working on implementing its approved development plans.
Domestically, developers' commitment to developing their land is expected to inject more residential and commercial units into the market, boosting economic activity in the construction sector and related industries. Regionally, Saudi Arabia's experience in implementing vacant land fees is considered a pioneering model in the region for addressing housing crises and regulating the real estate market.
The company's future steps
Regarding the actions it will take, Al Ramz Real Estate stated that it will apply for the legally mandated grace period from the relevant authority until the development work on those lands is completed. The company also reassured its investors that these invoices currently have no material impact on its operations or financial position.
