Recent Amendments to the Saudi White Land Tax Law

What you need to know

On 12 May 2025, the Saudi Council of Ministers approved significant amendments to the White Land Tax Law through Resolution No. 758 dated 1-11-1446H, corresponding to 29 April 2025, including the introduction of taxation on vacant real estate. These amendments are set to come into effect after the publication of their respective Implementing Regulations in the Official Gazette

Key highlights

1. Background
   • The White Land Tax (WLT) Law was originally issued by Royal Decree No. M/4 on 24 November 2015. 
   • The law imposed an annual tax of 2.5% on bare land and undeveloped land designated for residential or residential-commercial use within urban limits to promote development and cultivate a balanced real estate market.  
2. New Tax Naming and Scope
   • The law's name has been changed to "White Land and Vacant Real Estate Tax Law." 
   • It now also includes provisions for taxing vacant buildings – i.e., Vacant Real Estate Tax (V-RET). 
3. Effective date 
   • The Implementing Regulations for WLT and V-RET are anticipated to be issued within 90 days and one year, respectively. 
   • The amendments will take effect upon the publication of these Implementing Regulations in the Official Gazette.
4. Extended Definitions
   • Vacant Real Estate: Buildings within urban areas that remain unused for extended periods without acceptable justification, affecting the real estate market's supply.
   • White Land: All vacant land suitable for development within urban boundaries.
5. Amendment to Tax Rates
   • White Land Tax: A tax rate of up to 10% of the land value has been introduced for taxable areas not less than 5,000 square meters.
   • Vacant Real Estate Tax: A rate of up to 5% of the property value, potentially increasing up to 10% as per the Ministerial Committee's proposal.
6. Tax Procedures and Exemptions:
   • Specific criteria for applying taxes on white lands and vacant real estate.
   • Mechanisms to reduce tax noncompliance and promote fair application.
   • Exemption conditions for public service availability and development obstacles.
7. Administrative and Compliance Changes
   • Landowners must submit related documents within specified periods.
   • New provisions for objections and appeals through designated committees.
   • Implementation and coordination among relevant authorities for effective enforcement.
   • Allocation and use of collected taxes for housing projects.
8. Fine and Penalty Adjustments
   • Violations can result in fines up to the amount of the tax due, with penalties overseen by an official committee.

Impact on Stakeholders

While the details of the Implementing Regulations for the amended law are awaited, the amendments will significantly affect various aspects of the land and property market.

• Landowners will face higher tax rates and stricter compliance, requiring a reassessment of development strategies.
• Developers must focus on utilizing vacant real estate to manage tax burdens, emphasizing strategic use of urban spaces.
• Investors are encouraged to engage in property development to align with regulations and enhance investments.

Deloitte’s view

Stakeholders are urged to thoroughly review their portfolios and consult with tax advisors to fully understand the ramifications of these amendments. Staying informed about upcoming tax changes is essential to revise or modify strategies to mitigate the impact of the taxes. We encourage everyone to take proactive steps in alignment with the new legislation, thereby supporting seamless compliance and effective use of real estate portfolios. 

For further support, please reach out to your usual Deloitte contact or any member of the Deloitte Middle East Tax team listed in the contact section below.