Rate has been set at 2.5% of the value of urban land held by individuals or non-government entities
A tax on undeveloped land in urban areas of Saudi Arabia will be rolled out from this week, according to press reports.
The Housing Ministry plans to impose the so-called “white land” tax starting this week in Riyadh, early next month in Jeddah and by the end of April in the Eastern Province.
The news was reported by Arabic daily Al-Eqtisadiah and quoted by Zawya Projects.
The Saudi housing ministry in May outlined the rules of the upcoming annual tax, saying that the rate has been set at 2.5% of the value of land held by individuals or non-government entities.
Fees on undeveloped lands will be introduced in stages, according to an earlier statement by the state news agency SPA.
It will first be applied to undeveloped land with an area of 10,000 square metres and more, and later apply to plots of more than 5,000 square metres.
The tax was approved last year in a bid to tackle the kingdom’s housing shortage.
Analysts estimate that 40-50% of land inside major cities remains vacant, which has caused a lack of affordable housing, especially for young Saudis.
The new tax on vacant land in urban areas of Saudi Arabia will spur development and help reduce property prices by up to 40%, according to a report issued last summer.