Saudi council gives green light to undeveloped land tax – report
Legislation designed to ease housing crisis is set to be passed to king for approval
Saudi Arabia’s legislative council has endorsed a tax on undeveloped land in urban areas, with the proposed law set to be passed to the king for approval, it was reported.
The Saudi Cabinet said in March it would impose taxes on undeveloped plots of land within cities in a bid to resolve the country’s housing shortage.
The Shura Council endorsed the move but rejected a cabinet proposal to cap fees at 100 riyals ($26.67) per square metre, the Al Riyadh newspaper reported, according to Reuters.
Fees will now be imposed as a percentage of the land’s value, with the council recommending a tax rate of 2.5%, Bloomberg reported.
The proposed legislation is set to be passed to the Saudi king for approval “this week”, reports said.
Vast swathes of land in Saudi Arabia are owned by wealthy individuals who have held back from developing on it, amid a critical housing shortage in the kingdom.
According to real estate consultants CBRE about 60% of Saudi nationals – some 10 million people – live in rented accommodation and the rate of Saudi home ownership is about half the global average.
About 40% of Riyadh was estimated to comprise of empty plots in 2013, despite the reported shortage of 1.5 million affordable homes in Saudi Arabia, Bloomberg reported.
Housing minister Majed al-Hogail said earlier that the proposed fees would “encourage landowners to develop their land… and to provide lands of different and appropriate sizes for different segments of the society.”
