Riyadh Development Company announced in an official statement today, Tuesday, that it has begun reviewing and studying the invoices for vacant land fees it recently received, totaling approximately SAR 16.78 million. This step comes as part of the company's commitment to protecting its interests and those of its shareholders, and ensuring the accuracy of its financial obligations.
In a statement published on the Saudi Stock Exchange (Tadawul) website, the company explained that it is currently reviewing the received invoices and completing all necessary regulatory procedures. It noted that this process includes submitting formal objections to certain invoices that the company believes do not meet the terms or have technical issues, in accordance with the frameworks and regulations approved by the regulatory authorities and based on its legally guaranteed right to object and review.
Context and objectives of white land fees
This announcement comes amidst the economic and regulatory changes underway in the Saudi Arabian real estate sector, specifically concerning the "White Land Tax" program. This program is a key initiative launched by the Ministry of Municipal and Rural Affairs and Housing, aimed at increasing the supply of developed land to achieve a balance between supply and demand, providing affordable residential land, protecting fair competition, and combating monopolistic land practices within urban areas.
The system imposes an annual fee of 2.5% of the estimated land value, implemented in several phases, covering undeveloped land within specific urban boundaries. These fees are considered an effective economic tool to incentivize landowners to develop or sell their land, thereby contributing to an increase in the supply of real estate units in the market.
Financial impact and accounting treatment
Regarding the financial impact of these claims, Riyadh Development Company confirmed that it will handle these fees in accordance with international accounting standards adopted in the Kingdom, and in compliance with relevant regulations and instructions. The company emphasized its commitment to transparency and disclosure of any material developments in this matter, in the best interests of the company and its shareholders in the long term.
It is worth noting that Riyadh Development Company is one of the leading real estate development and service project management companies in the capital, playing a pivotal role in the urban development of Riyadh. Large real estate companies typically face such procedures as part of their operational cycle, as regulations provide official channels for appeals and the submission of documents proving land development or the existence of regulatory obstacles preventing it, which may lead to the cancellation or modification of fees in some cases.
