Sunday, June 26, 2016

The Executive Regulations of White Land Tax law

Chapter one
Definitions

Article one:

The words and phrases hereunder shall have the meanings set forth in front of each unless the context requires otherwise.

The Minister: Means Minister of Housing

The Ministry: Means Ministry of Housing

Undeveloped land: Means The land which still undeveloped for the purpose allocated for; As provided for by the law and regulations in force during the time of announcement.

White lands: Means Every empty plot allocated for residential use or residential commercial use; within the urban limits.

Taxpayer: Means The Natural Person or the Juridical Person that the title deed of the plot which subject to the fee during the time of the issuance of its decision registered in his name, including his heirs or his successor.

Announcement: Means The statement issued by the Ministry regarding the lands subject to the fee within a stage of the time schedule stages, as specified in Article (sixth) of the Regulation.

Developed land: Means The empty plot that its planning definitely approved by the Competent Authority.

Urban development: Means Regarding undeveloped land; it is to complete the implementation of its development in accordance with the regulatory requirements during the approval of its planning. As for the developed land; it is to complete the construction of residential facilities on it - except for fencing and the like- in accordance with its issued building permit.

The decree: Means The decree issued by the Minister concerning subjecting certain land for fee.

City: Means Any inhabited place, whether the city, governorate or province.

Urban limits: Means Lines indicated on the urban growth boundary maps, according to the approved rules for determining the urban growth boundaries, which shows the different stages of urban development, protection of development, represent the appropriate boundaries for the resettlement of urban activities, and accommodate urban growth within a specified period of time.

Public utilities: Means road, water, electricity, telecommunications, sewage and stormwater drainage networks.

Public services: Means religious, educational, health and security services, and the like; which not covered by the statutory ratio of planning.

Chapter two
The Lands subject to the fee

Article two:

1-     The reference in Drawing Urban Growth Boundaries and in the allocation of land use; is the Urban Growth Boundaries maps and the detailed layouts which issued by the Competent Authorities for its implementation.
2-     The result of modifying or changing the urban boundary of any city, is the changing of the spatial boundaries of the application fee.

Article three:
1-     Shall be formed at the Ministry by a decree of the Minister, a committee (or more) not less than three members, one of whom is a valuer at the Saudi Authority for Accredited Valuers (TAQEEM).
2-     The members of the committee are required to have sufficient expertise to carry out real estate assessment, and the duration of membership in the Committee is (three) years, subject to renewal.
3-     The Committee shall determine the fair value of the land subject to the application fee, in accordance with the standards and regulations set forth in the rules and regulations, and it shall issue its decisions by a majority of votes.
4-     The Committee's work rules and procedures and the remuneration of its members shall be issued by a decree of the Minister.

Article four:
The assessment of the value of the land subject to the application fee is based on its value at the time of announcement, and according to the following criteria:
1-     The location of the land within the urban boundary limits.
2-     its use.
3-     its terrain.
4-     The building regulations applicable to it.
5-     Whether it is enjoying public services, and has access to public facilities.
6-     The activities and the commercial, industrial and social use of the surrounding and its impact on residential use.

Article five:
1-     In order to assess the value of the land subject to the application fee; the determination of the availability of public services, and its access to the public facilities, as follows:
a-     Determine the public services and the public utilities which its availability affecting the value estimation for the land.
b-    Determine the weightiness of each service or facility, according to its necessity for housing.
c-     The weightiness of the service or the utility does not change in the same city.

2-     The Ministry shall conduct a periodic review of the weightiness of the service or the utility, provided that it calculates the total weight, in order to estimate the fundamental value of the land according to a special equation developed for this purpose by it.

Chapter three
Regulations on fee application

Article six:
the application of the fee on the land subject to the application fee, is according to the following stages:
The first stage: undeveloped land with an area of ten thousand square meters and more, located within the range set by the ministry.
a-     The second stage: Developed lands belonging to one owner in one approved plan, as long as the total area is exceeding ten thousand square meters.
b-    The third stage: Developed lands belonging to one owner in one approved plan, as long as the total area exceeds five thousand square meters.
c-     The fourth stage: Developed lands belonging to one owner in the same city, as long as the total area exceeds ten thousand square meters.
d-    If a certain stage did not apply to any of the cities, or the lands were not enough for certain stage to achieve the desired balance between supply and demand, may pass that stage and move to the next by a decree of the Minister.

Article seven:

The fee is applied in accordance with the following time schedule:
1-     The announcement of any city becomes subject to the application fee, based on the need to increase the supply of developed land.
2-     The ministry is periodically conducting a review of the situation in any city; in order to determine the application of fee to its lands, the suspension of the application, or to pass certain stage and move to any of the following stages in the same city, according to the detail set out in Article (sixth) of the Regulations.

Article eight:
The requirements for subjecting certain land to the application fee:
1-     To be an empty plot.
2-     To be within the urban boundary limits.
3-     To be designated for residential or commercial use, according to the approved plan issued by the competent authority.
4-     To be among the type of lands subject to the application fee, as set out in Article (sixth) of the Regulations.

Article nine:

1-     The fee does not apply to the land subject to the application in the following cases:
a-     The absence of any of the requirements of the application fee, which set out in Article (eight) of the Regulations.
b-    The existence of an impediment which prevents the landowner from the disposal of the land, provided that the taxpayer did not cause or participate in the creation of that impediment.
c-     The existence of an impediment which prevents the issuance of the required licenses and approvals for land development or construction, provided that the taxpayer did not cause or participate in the creation of that impediment.
d-    The completion of the land development or construction within one year from the date of issuance the decree.
2-     If the application of fee did not apply on part of the land, it shall be applied in the remaining part, provided that part falls within the type of land subject to the application fee and the taxpayer is able to dispose it.

Article ten:
The Ministry shall take the necessary measures to ensure fairness in the application of the fee, and to prevent evasion of paying the fee, including:
1-     The unification of the application and assessment criteria in all regions and cities and the target lands.
2-     Establishing the necessary mechanisms to verify the data submitted concerning the land or the taxpayer, in coordination with the relevant authorities.
3-     Considering all the correspondence, decisions and notifications forwarded to the taxpayer, producing its effects once notified at any of the addresses he provided.
4-     Coordination with the concerned authorities to ensure the none exploitation of land-use change - after the issuance of the announcement, which including it – in order to avoid paying the fee.
Chapter four
Communication with the taxpayers

Article eleven:
1-     A plan showing the exact geographical limitation of the target lands for the application fee shall be enclosed with the announcement.
2-     The announcement shall be published in two daily newspapers, and the website of the Ministry.

Article twelve:
1-     The Ministry determines the documents and data which the taxpayer is required to submit.
2-     notifying the taxpayer of the decision concerning his land must include - as a minimum - the following data:
a-     the name of the taxpayer and the number of his civil register and commercial record.
b-    The number of the title deed.
c-     Location of the plot.
d-    The legal document of the decision.
e-     Amount of the fee due.
f-      The fee payment due date.
g-    Method of fee payment.
h-    The consequences of non-payment of fees or late payment.
i-      The right of the taxpayer to appeal against the decision in accordance with statutory procedures.

Article thirteen:
1-     All the correspondence and notifications issued to the taxpayer must be in writing.
2-       The contact address provided by the taxpayer must include telephone numbers and his national address.

Chapter five
Fee collection

Article fourteen:
1-     The taxpayer is obliged to pay the fee and any penalty resulting from breaching the provisions of the rules and regulation.
2-     Collection of the fee retroactively for the earlier periods does not affect the imposing of any penalty as a result of the taxpayer's failure to pay or submit the legally required documents.
3-     The taxpayer must pay the fee within a period not to exceed one year from the date of the decree.
4-     If the taxpayer finished the land development or building within the year - referred to in sub-paragraph (d) of paragraph (1) of Article (nine) from the regulation - after paying the fee, he will be refunded back the money he paid for that year.
5-     The non-payment of the fee does not affect the right of the taxpayer to dispose of his land or developing it.

Article fifteen:
1-     The taxpayer shall be notified of the amount of the dues, or any penalty resulting from breaching the rules or regulation, in accordance with the notifying mechanisms specified in the Regulations.
2-     The dues shall be collected and any penalty resulting from breaching the rules or regulations in accordance with the collection procedures specified in the State Revenue Law and its executive regulations.
3-     The Ministry shall collect the dues and any penalty resulting from breaching the rules or regulations, in any way it deems appropriate and may resort to the private sector to achieve this purpose.
4-     The Ministry shall determine the expenditure from the account of the collected fees and penalties and use it for housing projects, public utilities delivery and provision of public services.

Article sixteen:
If the land subject to the application fee is owned by more than one person, whether Natural or Juridical Person, each shall be obliged to pay part of the fee according to his share in the ownership of the land.
Chapter Six
      General Provisions    
  
Article seventeen:
The Ministry is working on the continuous coordination with the concerned authorities in order to implement the provisions of the rules and regulations, so as to ensure the achievement of the objectives of the application of fees on white lands.

Article eighteen:
The Minister shall issue the necessary decisions for the implementation of the provisions of the Regulation.



Translation by Heba Musa

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