Property TypesVacant Land
Synonyms: Unbuilt land، Empty plot، Bare land
Last updated: 2026-09-25
Short Definition
Vacant land is a plot with no buildings or permanent structures on it, whatever its approved land use (residential, commercial, industrial or other); it is a general market term and is not identical to "white land", which is a legal term tied to annual fees in Saudi Arabia.
Overview
Vacant land is a plot with no buildings or permanent structures on it, whatever its approved land use (residential, commercial, industrial or other); it is a general market term and is not identical to "white land", which is a legal term tied to annual fees in Saudi Arabia. Vacant land may be serviced land within an approved subdivision plan or raw land whose infrastructure has not yet been built, and its price and buildability differ accordingly.
In Saudi Arabia, vacant land may fall under the White Land Fees and Vacant Properties Law, whose name and provisions were amended by Royal Decree M/244 dated 7/11/1446H. Under its implementing regulation, land is subject to the fee only if it is white land capable of development or building, lies inside a scope announced for the fee in the city, is at least 5,000 m² on its own or in aggregate with the owner's other white land in the same city, and its use is among those set by ministerial decision (which may cover all land uses). The annual rate depends on the development priority of the geographic zone: 10%, 7.5%, 5% or 2.5% of the land value, with no fee on the fifth tier outside the priorities. Value is estimated by a technical committee that includes valuers licensed by the Saudi Authority for Accredited Valuers (Taqeem), and state property is excluded. The amendment also introduced a separate fee on vacant (unoccupied) built properties, set as a proportion of fair rent capped at 5% of the property value, which the Council of Ministers may raise to 10%; its application depends on implementing rules and announcements.
In practice, holding vacant land has carrying costs: the annual fee where the conditions apply, the 5% Real Estate Transaction Tax on sale, fencing and cleaning costs, and capital tied up without income. The fee stops when development or building is completed within the payment period or when any condition ceases to apply, and fencing alone does not count as building under the regulation. Rising value from surrounding development is not guaranteed; it depends on location, approved use, access to services and the land supply in the city.
⚖️ Legal Basis
Vacant land subject to fees is governed by the White Land Fees and Vacant Properties Law, amended and renamed by Royal Decree M/244 dated 7/11/1446H, and its implementing regulation published in the Umm al-Qura gazette, which sets: tiers of 10%, 7.5%, 5%, 2.5% and 0% by development priority; a 5,000 m² threshold for a plot or an owner's aggregate white land in the city; payment within one Gregorian year of the invoice; and payment before transfer of ownership when land is sold before development is complete (Art. 13/5). Land sales are subject to the 5% Real Estate Transaction Tax under the law issued by Royal Decree M/84 dated 19/3/1446H.
💡 Practical Example
An investor in Riyadh owns two vacant plots inside the announced fee scope: 3,000 m² and 2,500 m², i.e. 5,500 m² in the same city, so the fee conditions are met even though each plot alone is under 5,000 m². The committee values the land at SAR 2,000/m², giving 5,500 × 2,000 = SAR 11,000,000; if the zone is in the second tier (7.5%), the annual fee is SAR 825,000, payable within one Gregorian year of the invoice. If he sells the 2,500 m² plot for SAR 5,000,000 before developing it, he must pay the fee due on it before ownership is transferred, and the sale bears 5% Real Estate Transaction Tax = SAR 250,000. After the sale his holdings drop to 3,000 m², so the fee stops applying because the area condition is no longer met.
⚠️ Common Mistakes
- ✗Treating "vacant land" and "white land" as the same — the fee does not apply to every unbuilt plot, only to land meeting the regulation's conditions inside an announced scope.
- ✗Assuming small plots are always exempt — the 5,000 m² threshold is measured on the total white land an owner holds in the city, not plot by plot.
- ✗Believing that fencing the land stops the fee — the regulation defines building as fully constructing structures under permits and expressly excludes fencing and similar works.
- ✗Selling the land before settling fees due — when land is sold before development is complete, the fee must be paid before ownership is transferred (Art. 13/5 of the regulation).
- ✗Assuming vacant land always appreciates — value depends on approved use, services and supply, and fees plus holding costs can erode the net return.
🌍 International Differences
Many countries rely on a general annual property tax on land and buildings rather than a dedicated fee on undeveloped land. In Turkey, land and buildings are generally subject to an annual municipal property tax, and Turkish distinguishes "arsa" (land within a zoning plan intended for building) from "arazi" (land outside it). The UAE has no general annual land tax, although some developers' land sale contracts include deadlines to start construction. The Saudi model stands out by linking the fee to development priorities within each city to increase the supply of developed land.
FAQs
What is the difference between vacant land and white land?▾
Vacant land is a market term for any unbuilt plot. White land is a legal term for land capable of development or building inside a scope announced for the fee, under the conditions set by the implementing regulation of the White Land Fees and Vacant Properties Law.
Is every vacant plot in Saudi Arabia subject to fees?▾
No. The land must lie inside the fee scope announced for the city, be capable of development or building, measure at least 5,000 m² on its own or in aggregate with the owner's other white land in the city, and have a use listed in the ministerial decision.
What are the white land fee rates?▾
The implementing regulation sets four tiers by development priority: 10%, 7.5%, 5% and 2.5% of the land value per year. The fifth tier, outside the priorities, bears no fee but still counts toward the owner's aggregate area.
When does the white land fee stop?▾
The fee stops when development or building is completed within the payment period, or when any condition ceases to apply, such as the area falling below the threshold. Amounts paid for that period are refunded if development is completed after payment, and fencing alone does not count as building.
Is there tax on selling vacant land?▾
Property sales in Saudi Arabia have been exempt from VAT since 4 October 2020 and bear the 5% Real Estate Transaction Tax on the disposal value instead. If the land is subject to white land fees, the fees due must be paid before ownership is transferred.
