RIYADH — The Ministry of Municipalities and Housing announced the approval of the executive regulations for vacant property fees. This is part of a broader regulatory framework aimed at improving the efficiency of real estate asset utilization and enhancing market balance.
The fees will be applied in accordance with specific criteria that evaluate market conditions in areas to be announced at a later stage. This initiative, which comes in line with the directives of Crown Prince and Prime Minister Mohammed bin Salman, is aimed at regulating the real estate market and achieving a balanced relationship between supply and demand.
The ministry explained that the regulations are intended to encourage the utilization of vacant buildings and increase the supply of residential and commercial units, thereby helping to curb practices that negatively affect market equilibrium.
The ministry further clarified that the fees will apply to vacant buildings located within geographical areas designated by ministerial decree. The designation will be based on market criteria and indicators, including vacancy rates, levels of supply and demand, property prices, and housing costs. The cities and areas subject to the regulations, along with the implementation mechanisms, will be announced once the vacancy criteria are met.
As per the regulations, a building is deemed vacant if it has not been used or occupied for six consecutive or non-consecutive months during the reference year. The ministry also stated that the permitted uses of buildings subject to the fee are determined in accordance with approved zoning plans or occupancy certificates. Property owners—whether individuals or legal entities—are required to pay the fee in proportion to their ownership share in cases involving multiple owners.
The regulations further stipulate that the fee amount will be assessed based on the fair market rental value of the building, in accordance with approved valuation standards. An annual fee of up to 5 percent of the property’s value may be imposed, taking into consideration the average market and rental values of comparable properties.
The ministry affirmed that the regulations account for circumstances in which a building cannot be occupied due to factors beyond the taxpayer’s control, as well as cases related to the issuance of occupancy certificates or the transfer of ownership in accordance with approved legal documentation.
It also noted that the regulations establish clear mechanisms for issuing invoices and notifying taxpayers, while preserving the right to appeal in accordance with approved procedures. In addition, taxpayers will be granted a payment period of up to six months from the invoice issuance date, thereby promoting procedural transparency and fair implementation.
The ministry added that the regulations provide for the allocation of fee revenues to support housing projects, contributing to urban development and enhancing the efficiency of land and real estate asset utilization.
Source: Saudi Gazette