White Land Tax in Saudi Arabia: 2026 Rates, Zones, Who Pays

Saudi Arabia's idle-land levy is no longer a flat 2.5% nudge. The white land tax Saudi Arabia applies today is a tiered annual fee of up to 10% of land value, gazetted on 12 May 2025 and charged where an owner's undeveloped urban holdings in a city reach 5,000 sqm. Riyadh's schedule runs 10%, 7.5%, 5% and 2.5% across four priority zones, with land outside the zones exempt but still counted toward the threshold (MOMAH, 8 Jun 2026). First invoices went out on 1 January 2026, to more than 60,000 Riyadh landowners in one cycle (AGBI citing MOMAH, 2 Jan 2026).

Key figures at a glance

What is the white land tax in Saudi Arabia now?

The original law (Royal Decree No. M/4 of 24 November 2015, Council of Ministers Decision No. 377 of 13 June 2016) charged a flat 2.5% of value a year on undeveloped urban land zoned residential or mixed-use (Mondaq legal update on the decree text). The 2025 rewrite is a different instrument. Cabinet approved the amendments on 29 April 2025 (Addleshaw Goddard); the Official Gazette published Royal Decree No. M/244 and Resolution No. 758 on 12 May 2025, retitling the regime the White Land and Vacant Properties Fees Law (King & Spalding); the sixteen-article Implementing Regulations of 24 August 2025 set the annual fee at up to 10% of land value on the highest-priority tier (MOMAH).

The rename matters: the law now has a second track for standing buildings, a vacant-property fee of up to 5% of value on buildings unused for six months of the reference year, with six months to pay from invoice (Saudi Gazette citing MOMAH, 15 May 2026). The Council of Ministers can lift that rate to 10% (King & Spalding).

The Riyadh five-tier schedule: 10%, 7.5%, 5%, 2.5%, exempt

Zone one, maximum development priority, pays 10% of land value a year; zone two pays 7.5%, zone three 5%, zone four 2.5%. Land outside the priority zones pays nothing, but its area still counts toward the owner's citywide total (MOMAH, 8 Jun 2026), which closes the dodge of scattering title across the zone boundary. A 10% annual charge is not a holding cost a speculative owner can absorb; over a decade it confiscates the parcel's entire value in fees.

Al-Narjis and Al-Aard hold Riyadh's largest stock of developed-but-unbuilt white land, 2.3 million sqm and over 1.6 million sqm, enough combined for over 13,500 housing units (MOMAH, 8 Jun 2026).

Who pays, when: threshold, invoices, appeals

Liability starts at 5,000 sqm, aggregated: the test is the total area an owner holds in the city, not any single parcel (MOMAH). Riyadh's first invoices were issued from 1 January 2026. An owner has 60 days from notification to appeal, the committee must rule within 60 days, and payment is due within one calendar year of invoicing (MOMAH, 8 Jun 2026).

A second phase began in Riyadh in December 2025; by June 2026 more than 25 million sqm had been registered under it, 16 million sqm of that in just 21 residential neighbourhoods (MOMAH). Phase two also covers Makkah, Jeddah and the Dammam metropolitan area; MOMAH's 8 June 2026 reminder gave owners five days left to register, with a non-registration penalty of up to 100% of the fee value on top of the fee itself (MOMAH, 8 Jun 2026). A doubled bill for staying silent is the enforcement teeth the 2016 law never had.

The developer math: what a landbank now costs to hold

Omran estimate (illustrative carrying cost). Take a hypothetical 20,000 sqm aggregate Riyadh holding at SAR 2,000 per sqm, an anchor set just above the Ministry of Justice's national average transacted price of SAR 1,965 per sqm in H1 2026 (Arab News citing MOJ); urban Riyadh land trades well above that average, so real bills run higher. Parcel value: 20,000 x 2,000 = SAR 40 million. Annual fee: SAR 4.0m in zone one (10%), SAR 3.0m in zone two (7.5%), SAR 2.0m in zone three (5%), SAR 1.0m in zone four (2.5%), zero outside the zones. Under the old flat 2.5% law the same landbank cost SAR 1.0m a year anywhere in the city; a five-year hold in zone one now burns half the land's value in fees.

What the market did next

The first quarter under invoicing produced the sharpest contraction in the Real Estate General Authority's dataset. National land transactions fell to 21,320 in Q1 2026, down 55% year on year; total land sale value dropped 65% to SAR 20.71 billion, with villa transactions down 44% and apartments down 38% (AGBI citing REGA data, Jul 2026).

Omran estimate (implied value per land deal). REGA publishes volumes and values, not a land price index. Dividing the confirmed aggregates, SAR 20.71bn / 21,320, gives roughly SAR 971,000 per land transaction in Q1 2026. Backing out the prior year from the published declines implies a Q1 2025 average near SAR 1.25 million, so the average deal shrank about 22% year on year. This is a mix-shift proxy, not a price index: it cannot separate cheaper land from smaller parcels changing hands.

One reading says the tax froze the market. Ours says the churn that vanished was largely the speculative resale layer the law was written to kill, and the deciding number is permits: building permits rose 28% year on year to 7,350 in April 2026 (AGBI, government-sourced, Jul 2026). MOMAH's own scoreboard points the same way: roughly 71 million sqm of Riyadh-region white land has entered development or trading, 29 million sqm of it completed, with fee revenue funding 27 urban projects (Amlak citing MOMAH, 17 Jun 2026).

The fee is one half of a policy pincer. The other half is the five-year Riyadh rent freeze in force since 25 September 2025 (King & Spalding): landlords cannot harvest rent growth while waiting, and landowners now pay to wait. Both push toward supply, in a residential market where prices were already softening.

What no official series shows yet

Three numbers the debate keeps reaching for are not in the primary record, and we will not borrow them from private brokerage surveys:

• A land price index tied to the tax. REGA publishes transaction counts and values; no government body publishes a Riyadh land price series. Our implied value-per-deal proxy above is the honest substitute.
• A national invoice count. MOMAH has disclosed Riyadh's 60,000+ January 2026 cycle but no kingdom-wide total across the phase-two cities.
• Cumulative fee revenue. Figures circulating for phase-one revenue could not be traced to a live primary source, so we treat the total as unpublished.

The zone maps, invoice mechanics and district-level registered-area releases are the kind of scattered primary record Omran assembles into one dated, sourced view. Request the white-land rate and rollout table if your underwriting depends on which tier a parcel sits in.

FAQ

What is the white land tax rate in Saudi Arabia? Up to 10% of land value a year since the Implementing Regulations of 24 August 2025. Riyadh's published schedule is 10%, 7.5%, 5% and 2.5% across four priority zones, with outside land exempt but still counted (MOMAH).

What is the minimum land size before the fee applies? 5,000 sqm, measured as the aggregate of all land one owner holds in the city, not per parcel (MOMAH).

Can foreigners own land that would be subject to the fee? Foreign ownership is opening under a separate 2026 framework with its own zones and conditions; any owner whose qualifying white land crosses the 5,000 sqm city threshold falls under the fee regime. See foreign property ownership in Saudi Arabia for the mechanics.

Sources

• Mondaq, original White Land Tax Law (Royal Decree M/4): link
• Addleshaw Goddard, Cabinet approval of amendments: link
• King & Spalding, gazette publication, rename, rate structure: link
• MOMAH, Implementing Regulations (24 Aug 2025): link
• MOMAH, Riyadh five-tier schedule and invoicing mechanics: link
• MOMAH, Al-Narjis and Al-Aard totals, phase-two registered areas: link
• MOMAH, phase-two registration reminder and 100% penalty: link
• Saudi Gazette citing MOMAH, vacant-property fee regulations: link
• AGBI citing MOMAH, 60,000+ Riyadh landowners billed: link
• AGBI citing REGA, Q1 2026 land slump and April 2026 permits: link
• Amlak citing MOMAH, 71 million sqm into development or trading: link
• Arab News citing Ministry of Justice, SAR 1,965/sqm average: link
• King & Spalding, Riyadh rent controls: link