Saudi Arabia is taking new steps to make better use of its real estate assets and bring more properties into the market. As part of these efforts, the vacant property regulations in Saudi Arabia introduce a framework for applying vacant property fees in Saudi Arabia to eligible properties in designated areas. But what exactly qualifies as a vacant property, when do the fees apply, and how could these regulations affect the real estate market? Let’s take a closer look. What Are Saudi Arabia’s Draft Vacant Property Regulations? Saudi Arabia’s draft vacant property regulations are a proposed framework introduced by the Ministry of Municipalities and Housing to regulate vacant property fees in Saudi Arabia within designated urban areas. The regulations aim to encourage property owners to make better use of their assets and support a more balanced real estate market by increasing the supply of available properties. What Are the Objectives of the Proposed Regulations? The proposed vacant property regulations in Saudi Arabia aim to improve the use of real estate assets and encourage property owners to make better use of vacant properties. By introducing vacant property fees in Saudi Arabia, the regulations also seek to increase property supply in urban areas and support greater balance between supply and demand in the real estate market. When Could a Vacant Property Become Subject to Fees? Under the proposed vacant property regulations in Saudi Arabia, a property could become subject to fees based on two key factors: The Property’s Vacancy Period: The property must remain unused or unoccupied for the period specified under the regulations. Whether the Property Is Suitable for Occupancy: The property’s condition and suitability for use or occupancy are considered when determining whether it falls under the vacant property fees. How Would the Applicable Properties and Cities Be Determined? The vacant property regulations in Saudi Arabia would not apply automatically to all properties or cities. Instead, the applicable areas and properties would be identified based on key market indicators, including supply and demand levels, vacancy rates, and geographic zones. These factors would help determine where vacant property fees should apply according to local real estate market conditions. What Would Property Owners Be Required to Do? Under the proposed vacant property regulations in Saudi Arabia, property owners would have several responsibilities, including: Disclosing the Property’s Occupancy Status: Owners would be required to provide accurate information about whether the property is occupied or vacant and comply with the relevant verification procedures. Paying Fees When the Property Has Multiple Owners: If a vacant property is jointly owned by several individuals, the applicable fee would be paid according to the ownership and payment rules set out in the regulations. When Could the Vacant Property Fee Be Suspended? The vacant property fee would generally be linked to whether the property continues to meet the conditions for being classified as vacant. The regulations also provide for cases where a property may be excluded from the fee, including situations where it cannot be occupied for reasons beyond the owner’s control, subject to the applicable requirements. How Could the Regulations Affect the Saudi Real Estate Market? The vacant property regulations in Saudi Arabia could affect the real estate market in several ways: Bringing vacant properties back into use: The regulations could encourage owners to make better use of properties that remain unoccupied. Increasing property supply: Reusing vacant properties could add more available units to the market. Supporting market balance: A larger supply of available properties could help improve the balance between supply and demand in areas covered by the fees. Improving asset utilization: The regulations could encourage more efficient use of existing real estate assets instead of leaving them unused. FAQ What is considered a vacant property in Saudi Arabia? A property is considered vacant if it has not been used or occupied for 6 consecutive or non-consecutive months during the reference year, subject to the regulations’ conditions. Have the vacant property regulations been approved? Yes. The Executive Regulations for Vacant Property Fees have been approved by the Ministry of Municipalities and Housing. When could a vacant property become subject to fees? A vacant property could be subject to fees if it meets the vacancy conditions and is located within a geographic area designated for fee application. Will vacant property fees apply across Saudi Arabia? No. The fees will apply only to cities and geographic areas announced by the Ministry based on specific market indicators. Who pays the fee when a property has multiple owners? Each owner is responsible for paying the fee according to their ownership share in the property. Can the fee stop once the property becomes occupied? The fee applies when the property meets the regulatory conditions for being classified as vacant. The regulations also cover cases where the property cannot be occupied for reasons beyond the owner’s control.