Estimation of ownership and rental allowances for investment projects

The principles for estimating ownership and rental allowances have been regulated pursuant to the Regulation for the Sale and Lease of State-Owned Real Estate and Lands for Investment Purposes No. (7) of 2017, as amended by Regulation No. (5) of 2018, as follows:

First

A- The value of the real estate belonging to the state and public sector, for the purposes of strategic projects, projects of a federal nature, and investment projects with a value of (250000000) two hundred and fifty million US dollars or more, shall be estimated by a committee formed as follows:

The President of the National Investment Commission – Chairperson.
The President of the Region’s Investment Commission or the Investment Commission of the governorate not organized in a region concerned – Member.
The Director General of the General Tax Authority – Member.
The Director General of the Real Estate Registration Directorate – Member.
A representative of the entity that owns the property – Member.

B- The value of the real estate belonging to the state and public sector, for the purposes of investment projects valued at less than (250000000) two hundred and fifty million US dollars, shall be estimated by a committee formed as follows:

The President of the Region’s Investment Commission or the Investment Commission of the governorate not organized in a region – Chairperson.
A representative of the National Investment Commission – Member.
A representative of the General Tax Authority in the governorate – Member.
A representative of the Real Estate Registration Directorate in the governorate – Member.
A representative of the entity that owns the property in the governorate – Member.

C- The committees stipulated in paragraphs (A) and (B) of this article may use, as a guide, the estimation regulations in force at the General Tax Authority and the Real Estate Registration Directorate, where the General Tax Authority issues such regulations in periodic volumes. They may also utilize relevant legal legislation on real estate value estimation, as well as experts and specialists, for the purpose of estimating sales and rental allowances.

D- Ownership or lease contracts for investment projects shall be concluded by the owning entity within (30) thirty days from the date of estimating the sale, lease, or musataha allowances.

Second / Ownership Allowances

1- Residential Projects

A- The lands allocated for residential projects within the master plan shall be transferred to ownership (tamlīk) for a sale allowance of (2%) of the land’s value, provided that the investor delivers the external infrastructure of the project free of charge. Initially, a percentage not exceeding (10%) of the area allocated for the residential project shall be allocated to the owning entity for the purpose of investing it in a manner that does not conflict with the fundamental and sector-based design of the project, according to the regulations for allocating the (10%) share.

B- The investor, the developer, and the secondary developer shall be granted ownership of lands allocated for housing purposes located outside the master plan without any allowance, on the condition that the land’s value is not included in the value of the residential unit sold to the citizen; the investor shall provide the external infrastructure of the project free of charge. Furthermore, a percentage of (10%) of the area allocated for the residential project shall be allocated to the owning entity for the purpose of investing it according to the regulations for allocating the (10%) share.

2- Industrial Projects

A- The land allocated for industrial projects outside the master plan shall be transferred to ownership (tamlīk) for a sale allowance of (5%) of the real value of the land.

B- The lands allocated for industrial projects located within the master plan shall be transferred to ownership (tamlīk) for a sale allowance of (15%) of the real value of the land.

Third / Rental Allowances

Multi-purpose residential cities

A. The land necessary to implement the residential project(s) or multi-purpose residential cities, such as entertainment, commercial, or service complexes within the residential cities (after subdivision), shall be rented or leased through musataha for a rate of (7%) seven percent of the estimated rental allowance of (10%) of the real value of the land. The investor shall return the lands used for public benefit, such as parks, roads, and others, to the competent governmental authorities within (60) sixty days from the date of completing the project, free of charge.
B. Exempted from the above are lands allocated for non-profit public services within the residential complexes, such as police stations, fire stations, and places of worship.

Agricultural projects

A. Lands allocated for agricultural projects that lead to an increase and improvement in animal and plant production shall be rented by following the technical matrix adopted by the Ministry of Agriculture, as follows:

1. Reclaimed lands suitable for cultivation and having a water share shall have a rental allowance of (20%) twenty percent.
2. Unreclaimed lands suitable for cultivation and having a water share shall have a rental allowance of (10%) ten percent.
3. Unreclaimed lands suitable for cultivation and lacking a water share shall have a rental allowance of (2%) two percent.
4. Unreclaimed lands not suitable for cultivation and lacking a water share shall have a rental allowance of (1%) one percent.
Industrial projects established in areas designated for industrial investment projects shall have a rental or musataha allowance of (2%) two percent.
Electrical and oil projects, and others located outside municipal boundaries and implemented under (BOT) Build, Operate, Transfer or (BOO) Build, Own, Operate or otherwise, shall have a rental or musataha allowance of (2%) two percent.
Service projects, such as health and educational facilities and others, shall have a rental or musataha allowance of (5%) five percent.
Tourism projects, such as tourism cities, amusement parks, recreational complexes, etc., shall have a rental or musataha allowance of (10%) ten percent.
Commercial projects, such as shopping centers, hotels, etc., shall have a rental or musataha allowance of (10%) ten percent for the first fifteen years from the date of starting the commercial operation of the project. After the end of this period, the allowance rate shall be (3%) three percent of the land’s value, and this shall be stipulated in the investment contract concluded between the two parties.

Fourth / Date of Allowance Entitlement and Reassessment

The entitlement to the ownership, rental, or musataha allowance begins from the date of the commercial operation or production of the project, provided the investor completes the project within the period specified in the contract.
The rental allowances stipulated in the Regulation shall be reassessed every five years.