Details of the real estate expropriation system

Details of the real estate expropriation system

Through Vision 2030, the Kingdom of Saudi Arabia aims to create a sustainable investment environment and attract large investments by modernizing existing real estate systems and creating new ones that are compatible with the needs of the real estate market. Among the modern real estate systems, the Real Estate Expropriation System was issued for the public interest to contribute to the implementation of development projects and improve the Kingdom’s infrastructure while preserving the rights of the original owners and compensating them in the event of encroachment on their property.

What is the law on expropriation of real estate for public benefit?

It is a system that aims to regulate the process of expropriating real estate in order to implement projects that serve the public benefit in specific cases specified by the system, as the system requires the project owner to ensure that there are no government lands or properties that meet the project’s needs before starting expropriation procedures.

What are the most notable updates to the new expropriation system?

The new Public Interest Real Estate Expropriation System was issued to replace the old system, which will be implemented at the end of 2025. The new system contains clear expropriation procedures in addition to various fundamental updates from the previous system, the most important of which are:

• Determine the value of compensation for the property removed for the public interest.
• Real estate evaluation is carried out by residents accredited by the State Real Estate Authority.
• Exempting the owner of the expropriated property from the real estate transaction tax resulting from owning the alternative property and white land fees if the compensation is alternative land.
• Determine the authority competent to consider expropriation requests, which is the General Authority for State Real Estate.

What are cases of expropriation for the public interest?

The process of expropriation of real estate is carried out for the public interest that achieves the public benefit to society, or the private interest of a natural or legal person, or prevents harm achieved in cases of disasters, epidemics, etc., and includes the following cases:

• Projects to construct roads, streets and public transportation facilities.
• Projects to develop the facilities of the Two Holy Mosques.
• Exploration, drilling and mining projects.
• Construction of military facilities and internal security projects.
• Urban development projects for cities such as building mosques, parks, health, social or educational services, etc.
• Projects to extend electricity, energy, water, gas, sanitation, communications, etc.
• Heritage preservation projects and environmental reserves.

What is the difference between expropriation of real estate and temporary seizure of it?

What is the difference between expropriation of real estate and temporary seizure of it?

• Expropriation of real estate: Ownership of the property is transferred from its original owner to the project owner in accordance with the provisions of the system, and the compensation provided to the owner of the damaged property is fair and consistent with the value of the expropriated property.
• Temporary seizure of the property: The property is used for projects that achieve the public interest temporarily without transferring its ownership, and the property owner is compensated after its purpose has expired and returned to him.

What are the steps for expropriation?

The system has established specific procedures for organizing requests to expropriate or seize real estate, with a specific time period specified for each procedure. The expropriation steps are detailed as follows:

• The project owner shall submit a request for expropriation or seizure to the General Authority for State Real Estate.
• The application shall be referred to the committee responsible for expropriating real estate to study the application and respond to it, either with approval or rejection, within 60 days from the date of creating the application.
• Publish the removal decision in the Official Gazette of the State.
• The contents of the property shall be listed by the project owner and the report shall be sent to the Authority within 60 days from the date of publication of the expropriation decision in the Official Gazette.
• The value of the property is assessed and the appropriate compensation amount is determined by the General Authority for State Real Estate within a period of 90 days from the date of submitting the property contents inventory report to the Authority.
• Complete the procedures for disbursing compensation, expropriation, and eviction of the property within 90 days from the date of completion of the disbursement justifications.

What are the procedures for disbursing expropriation compensation?

Compensation for expropriation of the property is paid as follows:

• Financial compensation:
• Upon expropriation, the property owner is entitled to the following compensation:
• The value of the expropriated property is determined based on the value of the property in the market.
• 20% of the property value as compensation for expropriation.
• The value of damages resulting from property expropriation procedures.
• The property owner is entitled to the following compensation when temporarily seizing his property:
• The compensation value is not less than the equivalent wage.
• 20% of the value of the proverb’s rent as compensation for temporarily seizing the property.
• Damage caused by temporary hand placement.
• Compensation in kind: The new system allows compensation for expropriation to be alternative land in specific cases, namely:
• The project owner must be a government agency.
• The expropriated land must be vacant land that has not been invested or developed.
• The replacement land must be in the same location as or close to the removed land.
• The replacement land must have the same specifications as the removed land.
• The value of the replacement land must not be less than 20% and not more than 40% of the value of the expropriated land.

What is the new expropriation regulation?

What is the new expropriation regulation?

The new expropriation regulations aim to regulate the provisions and procedures contained in the real estate expropriation system for the public interest and temporary seizure of the property.

Updates to real estate regulations currently require the assistance of a specialized lawyer from Abdul Majeed Al Rashid Law Office and legal consultations in real estate cases before taking any step.

Lawyer Abdul Majeed Al Rashid’s office helps you review contracts and decisions issued by the relevant authorities regarding real estate expropriation and guides you to take the right action at the right time.

Book a specialized legal consultation about the property from the office of lawyer Abdul Majeed Al Rashid to understand your legal position correctly…