Jabal Omar Development Company, one of the largest real estate development companies in the Kingdom of Saudi Arabia, announced that it has received invoices for fees on undeveloped land totaling more than 31 million Saudi riyals for the years 2022, 2023, and 2024. In an official statement on the Saudi Stock Exchange (Tadawul), the company explained that it has submitted a formal request to object to these fees and seek exemption from them, based on the fact that the criteria and conditions for imposing the fees do not apply to its lands according to the executive regulations of the program.
The amounts imposed on the company were distributed as follows: 7,591,108 riyals for 2022, 7,423,600.5 riyals for 2023, and 16,029,081.8 riyals for the current year 2024. This government measure reflects the seriousness of the authorities in implementing the white land fees system, which aims to address the challenges in the real estate sector.
General context of the White Land Fees Program
The “White Land” program is one of the key government initiatives launched under the Kingdom’s Vision 2030, aiming to increase the supply of developed land within the urban boundaries of major cities. The program seeks to curb land hoarding practices that leave land undeveloped for extended periods for speculative purposes, which contribute to inflated property prices and make homeownership difficult for a large segment of the population. A 2.5% annual fee, calculated on the estimated value of the land, is levied on undeveloped plots, providing a strong incentive for owners to develop their land or sell it to other developers. This, in turn, helps to balance the real estate market and provide more residential and commercial units.
The importance of the event and its expected impact
This case is particularly significant as it involves Jabal Omar Development Company, which is undertaking one of the largest development projects in the central area surrounding the Grand Mosque in Mecca. Applying fees to a company of this size, and on a strategic project serving pilgrims, sends a clear message that the system applies to everyone without exception, thus enhancing transparency and fairness in the market. Locally, the final decision in this case is expected to influence the strategies of other real estate developers, potentially prompting them to accelerate their land development to avoid similar fees. On a broader economic level, the success of the White Land Program in achieving its objectives will contribute to stabilizing property prices, boosting the growth of the construction sector, and realizing the goals of Vision 2030 related to increasing homeownership rates among citizens.
