Saudi Arabia’s Ministry of Municipalities and Housing has approved new executive regulations for vacant property fees as part of major efforts to improve real estate utilization, increase housing supply, and create better balance in the Kingdom’s property market. The new regulations are designed to reduce long-term vacancies in residential and commercial buildings while supporting urban development goals under Vision 2030.
Saudi Arabia Introduces Vacant Property Fees
The ministry confirmed that the vacant property fees will apply based on specific market indicators and conditions in selected geographical areas that will be announced later through official ministerial decisions.
The initiative comes in line with the directives of Crown Prince and Prime Minister Mohammed bin Salman to regulate the real estate market and strengthen the balance between supply and demand across Saudi Arabia.
The new regulations aim to encourage property owners to utilize vacant buildings instead of leaving them unused for extended periods. Officials believe this step will help increase the availability of residential and commercial units while reducing practices that negatively impact market stability and housing affordability.
The ministry explained that areas subject to the fees will be selected according to several criteria, including:
- Vacancy rates in the area
- Supply and demand levels
- Property market prices
- Housing and rental costs
When Is a Property Considered Vacant?
Under the approved executive regulations, a property will be classified as vacant if it remains unused or unoccupied for six months, whether consecutive or non-consecutive, during the reference year.
The ministry also clarified that permitted building uses will be determined according to approved zoning plans and occupancy certificates issued by the relevant authorities.
Fee Amount and Property Valuation Rules
The vacant property fee will be calculated based on the fair market rental value of the building using approved valuation standards. According to the regulations, authorities may impose an annual fee of up to 5 percent of the property value.
The calculation will consider:
- Average market value of similar properties
- Rental values in the same area
- Official property valuation standards
In cases where a property has multiple owners, each owner will be required to pay the fee according to their ownership percentage.
Exceptions and Appeal Procedures
The ministry emphasized that the regulations take into account exceptional circumstances where buildings cannot be occupied due to factors beyond the owner’s control. The rules also cover situations involving occupancy certificates and ownership transfers supported by official legal documents.
In addition, the regulations establish clear procedures for issuing invoices, notifying taxpayers, and allowing property owners to file appeals under approved legal mechanisms.
Property owners will also be granted up to six months from the invoice issuance date to pay the fees, ensuring transparency and fair implementation of the new system.
Revenue to Support Housing Projects
The ministry stated that revenues collected from vacant property fees will be directed toward housing and urban development projects across Saudi Arabia. The move is expected to improve the efficiency of land and real estate asset utilization while supporting long-term housing initiatives.
