Real Estate Expropriation - His Excellency the Minister of Finance and Chairman of the Board of Directors General Authority for Real Estate The State, Professor Mohammed bin Abdullah Al-Jadaan, the highest expressions of thanks and gratitude to the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and to His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Prime Minister - may God protect them - after the issuance of the Cabinet’s approval of the expropriation system Real estate ownership For the public interest and temporary seizure of real estate.
Al-Jadaan emphasized that the approval of the new system comes within the framework of legislative and regulatory developments taking place in the Kingdom in light of the goals of Saudi Vision 2030. He emphasized that it aims to standardize procedures for expropriating or temporarily seizing real estate, ensuring speed and transparency and serving the public interest.
The system also establishes the principle of fair compensation for property owners, balancing individual rights with development needs.
Features of the new real estate expropriation system
For his part, His Excellency the Governor of the General Authority for State Properties, Dr. Abdulrahman bin Hamad Al-Harkan, commended the wise leadership's approval of the system, noting that its provisions guarantee the rights of both owners and project owners.
Al-Harkan explained that the system stipulated:
Valuation of expropriated properties by appraisers accredited by the Saudi Authority for Accredited Valuators, according to fair market value.
Add 20% above the appraised value as additional compensation to the owners.
Compensation for temporary possession in the amount of “fair rent” plus a 20% surcharge.
Al-Harkan added that the system also exempts owners whose properties have been expropriated from real estate transaction tax for a period of five years, at an amount equal to or less than the value of the compensation, in the event that alternative properties are purchased. This exemption begins from the date of receipt of the compensation.
It also stipulates that owners are exempted from white land fees if the compensation is in the form of alternative land.
Transparency and strict regulatory procedures
Al-Harkan explained that the new system unifies the framework for organizing, supervising, and monitoring expropriation and temporary possession operations, with applications being submitted to a specialized committee within the General Authority for State Properties, which includes representatives from a number of relevant government agencies.
The system also stipulates that the necessary financial allocations must be secured before initiating procedures, with priority given to finding state-owned properties that can serve the project's purpose before resorting to expropriating private properties.
Supporting development and protecting citizens' rights
The adoption of this new system affirms the Kingdom's commitment to achieving a balance between the requirements of comprehensive development and the protection of citizens' rights. This is achieved by regulating expropriation processes in a fair and transparent manner, enhancing owners' confidence and granting project-implementing entities greater flexibility in implementing their plans in a manner that serves the public interest.
