The Saudi Real Estate Company, one of the Kingdom's leading real estate developers, announced that it has received invoices related to vacant land fees totaling approximately SAR 61.64 million. This announcement underscores the company's commitment to transparency with its shareholders and the financial market, and its compliance with government regulations aimed at organizing the real estate sector.
In its announcement, Al-Aqar Real Estate Company clarified that these invoices pertain to 487,840 square meters of its land portfolio in Riyadh, representing 4.65% of its total land holdings in the capital. The company indicated that this action follows its previous disclosure published on the Saudi Stock Exchange (Tadawul) website, in which it revealed the lands subject to the fees.
Background of the White Land Fees Program
The “White Land” program is one of the key government initiatives launched under Saudi Vision 2030, with its regulations approved by the Council of Ministers in 2016. The program primarily aims to increase the supply of developed land within the urban boundaries of major cities, thereby curbing monopolistic practices and contributing to the provision of affordable residential land. An annual fee of 2.5% of the estimated value of undeveloped land owned by one or more individuals or legal entities is levied on undeveloped land, incentivizing owners to develop their land or sell it to other developers.
Expected impact and importance of the decision
The application of vacant land fees to major real estate companies like Al-Aqaria is of paramount importance to the local market. Domestically, this measure underscores the government's commitment to implementing its regulatory policies for the housing sector, thereby accelerating the development of residential and commercial projects. This is expected to increase the supply of housing units in the medium and long term, potentially contributing to more stable property prices and making them more accessible to a wider segment of the population. Furthermore, this measure represents a new source of non-oil revenue for the state, which can be reinvested in infrastructure development and housing projects.
At the regional and international levels, these steps enhance the attractiveness of the Saudi market to foreign investors, reflecting a transparent and stable regulatory environment aimed at achieving sustainable development. They also highlight the Kingdom's efforts in addressing economic and social challenges, such as housing, as part of its ambitious economic transformation plan.
Invoice details and financial impact
The company detailed the invoices according to different categories. Invoices within the first category (10%) amounted to approximately SAR 56.81 million and include land currently under development and land in the final stages of contractor appointment. Meanwhile, invoices within the fourth category (2.5%) amounted to approximately SAR 4.84 million and relate to land within the "Al-Aqar Park" project designated for divestment. The company confirmed that it does not currently expect these invoices to have a material financial impact beyond what has been disclosed, and it remains committed to announcing any future developments in accordance with applicable regulations.
