Idle Land fees regulation submitted for public feedback

The Ministry of Municipalities and Housing, through the 'Istitlaa" platform, invited the public to express their views on the executive regulations of the Idle Land Fees law by July 25, 2025.

The move aims to increase the efficiency of fees on idle lands to spur the real estate market, increase the supply of developed lands and real estate units, achieve a balance between supply and demand, protect fair competition, and combat monopolistic practices, said the ministry.

According to the regulation, one or more assessment committees shall be formed in the ministry with at least three members, including licensed assessors from the Saudi Authority for Accredited Valuers, to assess the value of the land subject to the fee.

According to the ministry, determining the public services availability for land and access to public utilities shall be based on several factors, including identifying the public services and utilities whose availability affects the land’s value assessment and determining the weight of each service or utility based on its necessity to the land, provided the weight remains consistent within the same city.

The ministry may conduct periodic reviews of the weight assigned to each service or utility, and the total weights are used to assess the basic value of the land according to a specific formula developed by the ministry for this purpose.

Meanwhile, the fees shall be based on the availability of one of the following criteria such as a gap between supply and demand, inflationary real estate prices, shortage in the supply of developed lands, failure to develop the land, and the percentage of undeveloped land within the urban boundaries.

The mechanism for calculating the fee percentage shall be as follows:

- Base Rate: 2.5% of the land’s value, applied equally across all areas subject to the fee.

- Annual Increment Rate: The decision may include a progressive rate that is added annually and remains fixed for a specified period.

- Variable Rate: This is a rate set to ensure fair application of the fee based on cases of unbalanced growth in real estate prices, or cases of sharp decline within the area or parts of it subject to the fee.

According to data available with Argaam, the Saudi Cabinet approved, in April, amending the idle land fees regulation.