Saudi Real Estate Economy 2026: White Land Fees, Rent Freeze, and the Villa-to-Apartment Shift - A Complete Citizen's Guide

Introduction: Understanding Major Shifts in the Real Estate Market

The Saudi real estate market is undergoing a fundamental transformation that affects every citizen and resident. From white land fees now reaching ordinary individuals, to the historic rent freeze decision in Riyadh, and the major social shift in housing patterns from villas to apartments. This comprehensive guide explains everything you need to know in simple, straightforward language.

Whether you're a landowner wondering about fees, a tenant worried about rent increases, or a family considering moving from a villa to an apartment, you'll find clear answers and updated information through January 2026 here.

Part One: White Land Fees - When Do You Pay and When Are You Exempt?

What is White Land?

White land is simply any vacant, undeveloped land without buildings or fencing, designated for residential or mixed residential-commercial use, located within the urban boundary of a city. The government imposed fees on such land to achieve a clear goal: forcing owners to develop or sell them, thereby increasing housing supply and lowering prices.

The New Development: Fees No Longer Just for Big Developers

Previously, white land fees targeted large real estate traders with massive holdings. However, with new amendments issued in April 2025 and implemented starting January 2026, fees now reach ordinary citizens as well.

When Do Fees Apply to You as an Individual?

If you're an ordinary citizen who owns land, you'll pay fees in the following cases:

The first condition is area. If your vacant land exceeds 5,000 square meters in cities where the system applies such as Riyadh, Jeddah, and Dammam, you're covered by the fees. If you own multiple plots totaling more than this threshold in the same city, you're also covered even if each individual plot is smaller than 5,000 meters.

The second condition is location. The land must be within the targeted urban boundary where services and facilities are available. Remote lands outside the urban boundary are not subject to fees.

The third condition is the absence of regulatory barriers. If your land has a pending court dispute or a deed problem preventing you from disposing of it, you're temporarily exempt until the issue is resolved.

Excuses That Don't Qualify for Exemption

It's very important to know that some common excuses don't exempt you from fees. If you say you're saving the land for your children in the future, that's not an acceptable excuse. If you say you don't currently have the liquidity to build, that's also not acceptable. The only valid exemption is having a genuine regulatory barrier or actually starting development and obtaining a building permit.

How Much Will You Pay? Basic and Progressive Fees

The basic fee is 2.5% of the land value annually. This means if your land is worth one million riyals, you'll pay 25,000 riyals every year. However, new amendments added progressive fees that may reach 10% in certain cases.

Progressive fees are imposed if you continue to hold the land without developing it despite years passing, especially if it's in an area with urgent housing needs. The goal is financial deterrence to force you to decide either to develop or sell.

Fee Tiers in Riyadh 2026

In Riyadh specifically, lands have been divided into four tiers by priority. The first tier is highest priority and includes areas most in need of development, where fees may reach 10%. The second and third tiers have intermediate rates. The fourth tier is low priority with only 2.5% applied. There's also a tier outside the priority zones where no fees are charged but it counts toward your total land holdings.

What Should You Do If Fees Apply to You?

You have several options. The first option is to develop the land by obtaining a building permit and actually starting the project. The second option is to sell the land to someone who can develop it. The third option is to pay the fees annually if you prefer to wait, but remember fees may increase progressively.

You must apply to the Ministry of Municipalities and Housing within 6 months of the announcement that your land is subject to fees, submitting required documents and data. Delay exposes you to financial penalties.

Part Two: Rent Freeze in Riyadh - The Historic Decision

What Exactly Happened?

On September 25, 2025, a historic directive was issued by Crown Prince Mohammed bin Salman to halt annual increases in residential and commercial property rents within Riyadh city for a full 5 years. This means your current rent will remain fixed until at least September 2030.

Why Was This Decision Made?

The decision came in response to major challenges faced by Riyadh residents in recent years. Rents had increased by more than 40% in just two years in some neighborhoods. This sharp increase strained family budgets and forced many to move to distant neighborhoods or even leave the capital.

What Exactly Does the Decision Cover?

The decision covers all residential and commercial properties within the urban boundary of Riyadh city. It applies to existing contracts and new contracts to be signed. Even vacant properties offered for rent must be priced according to the last rental contract registered on the Ejar platform.

Does the Decision Cover All of Saudi Arabia?

No, the decision currently applies only to Riyadh city. However, the system allows applying the same provisions to other cities and governorates when needed, by decision of the Real Estate General Authority board after approval from the Council of Economic and Development Affairs.

What Are Your Rights as a Tenant?

Your first right is that your rent won't increase for 5 years. Your second right is that the landlord cannot force you to vacate except in very specific cases such as wanting to use the property for themselves or first-degree relatives. Your third right is to object to the Real Estate General Authority within 60 days of contract registration if you find any violation.

What If the Landlord Violates the Rules?

A landlord who violates by raising rent or refusing renewal without a legal reason faces a fine of up to 12 months of rent value, with obligation to correct the violation and compensate the affected party. Whoever reports the violation may receive a reward of up to 20% of the collected fine.

Importance of Registration on Ejar Platform

Registering your contract on the Ejar platform has become mandatory and is the only guarantee of your rights. Unregistered contracts don't enjoy full legal protection. Make sure to register your contract immediately if you haven't already.

Part Three: Retirees' Rental Crisis - The Weakest Link

Why Are Retirees Most Affected?

Retirees live on a fixed income that doesn't increase with inflation. While rents were rising annually at significant rates, a retiree's pension stays the same. This growing gap between fixed income and rising rent created a real crisis.

Shocking Numbers

Let's take a realistic example. A retiree receiving 6,000 riyals monthly, meaning 72,000 riyals annually. Rent for an average apartment in a good Riyadh neighborhood has reached about 50,000 riyals annually. This means rent alone consumes more than 70% of their entire income. What's left for food, medicine, transportation, and other life necessities?

Even the average salary in Riyadh of about 26,000 riyals monthly now sees housing costs consuming 38% or more, exceeding the international standard that housing costs shouldn't exceed 30% of income.

Painful Real Stories

Many cases were documented of families forced to migrate from central and northern Riyadh neighborhoods to very distant areas on the city's outskirts, searching for rents matching their income. Some chose reverse migration to smaller, cheaper cities. This forced displacement has heavy social consequences: separation from children and grandchildren, difficulty accessing hospitals and specialized health services, loss of social networks built over decades.

How Does the Rent Freeze Decision Help Retirees?

The 5-year rent freeze decision came as a lifeline for this vulnerable group. Now retirees can plan their budget comfortably knowing their rent won't suddenly jump. This stability means a lot for those living on limited income.

What Can Retirees Do?

First, ensure your contract is registered on the Ejar platform to guarantee your rights. Second, if the landlord tries to raise rent or force you to vacate, report immediately through the Real Estate General Authority website. Third, inquire about housing support programs available for seniors and retirees from the Ministry of Human Resources. Fourth, consider the option of living with children if circumstances allow, as this traditional solution has social and financial benefits.

Part Four: The Villa to Apartment Transition - Psychological and Social Shock

Why Is This Transition Psychologically Difficult?

The transition from villa to apartment in Saudi society isn't just moving from one building to another. It's a departure from a deeply rooted culture of independent housing to a new pattern of shared living. This transition carries real psychological and social pressures that cannot be ignored.

Social Pressure and Community Perception

Collective consciousness still associates villas with prestige, stability, and success, while apartments are linked with temporary phases or financial decline. A family moving from a villa to an apartment faces embarrassing questions and hints from relatives and neighbors. This social pressure increases tension and makes the decision harder even if it makes financial sense.

Claustrophobia and Space Compression

Moving from a villa with spacious areas, private courtyard, and multiple rooms to an enclosed apartment creates feelings of suffocation. Loss of acoustic and visual privacy from neighbors is something new for many families. Real stories speak of depression cases affecting housewives who lost their private kingdom and had to dispose of beloved furniture and memories due to lack of space.

Architectural Adaptation: Middle-Ground Solutions

The market has begun responding to this psychological pain through new products attempting to combine villa and apartment advantages. Duplex apartments provide two internal floors giving a sense of spaciousness. Penthouse apartments on upper floors provide a private rooftop partially compensating for the lost courtyard. Apartments with independent private entrances give a feeling of independence even within a building.

Changing Demographics of Saudi Families

With the changing structure of Saudi families toward smaller nuclear families, gradual acceptance of the apartment pattern has begun to form. A family consisting of a couple with one or two children doesn't necessarily need a huge villa. A modern apartment in an excellent location near work, schools, and services may provide better quality of life than a villa on the city's far outskirts requiring hours of daily driving.

How to Deal with This Transition?

First, accept that it's normal and doesn't reflect personal failure. Millions of families worldwide live in apartments and lead happy lives. Second, focus on advantages: proximity to services, lower maintenance costs, security in residential compounds. Third, choose an apartment with specifications matching your needs: adequate space, good natural lighting, balcony or rooftop if possible. Fourth, reorganize your financial priorities, as money saved from rent or installments can be directed to improving quality of life in other ways.

Part Five: Solutions and Future Expectations

What Is the Government Doing?

The Saudi government is working on several parallel tracks. White land fees aim to force hoarders to develop their lands or sell them, increasing supply and lowering prices in the medium term. Rent freeze provides immediate protection for tenants and prevents exploitation. Massive housing projects under Vision 2030 add thousands of new units annually. Housing support programs help citizens own homes with easy installments.

What Can You Do as a Citizen?

Educate yourself about your rights and duties. Read regulations and rules, don't rely on rumors. Register your contracts officially on government platforms. Report any violations you face. Plan your housing future realistically based on your actual income, not on dreams that may not come true. Take advantage of available support programs if you qualify.

Expectations for Coming Years

With implementation of progressive white land fees, a gradual increase in developed land supply is expected. Rent freeze will provide stability to Riyadh's rental market until at least 2030. New housing projects will provide more diverse options fitting various budgets. Community culture will gradually change toward greater acceptance of apartments as a respectable housing option.

Final Tips

Don't make hasty decisions under pressure. Study your options calmly and consult specialists. Remember that housing is a means not an end, and the goal is a dignified, stable life for you and your family. Circumstances change and solutions evolve, and the most important thing is to stay informed and adapt intelligently to developments.

Frequently Asked Questions

Do white land fees include land I own for future building?

Yes, if it exceeds 5,000 square meters and is within the urban boundary and you haven't actually started developing it. Saving land for the future is not an excuse for exemption.

Does the rent freeze decision include Jeddah and Dammam?

Currently, the decision applies only to Riyadh city, but it can be extended to other cities later as needed.

What should I do if my landlord raises my rent despite the freeze decision?

File an immediate report through the Real Estate General Authority website. Violating landlords face fines up to 12 months of rent value.

Is an apartment a good investment or is it better to wait to buy a villa?

It depends on your circumstances. An apartment in an excellent location may be a better investment than a villa in a distant location. What matters is balancing your needs with your capabilities.

When will real estate prices drop?

No one can predict precisely, but increased supply through white land fees and government projects should limit sharp increases in the medium term.

Conclusion

The Saudi real estate market is going through a comprehensive rebalancing phase. White land fees pressure hoarders. Rent freeze protects tenants. The shift in housing patterns reflects a new economic reality. As a citizen, the best thing you can do is understand these transformations, know your rights, and plan realistically for your housing future. The government is working on long-term solutions, but responsibility is shared, and the more aware and prepared you are, the better you can face challenges and seize opportunities.