Riyadh – Mubasher: The Saudi Ministry of Housing said it will impose a tax on undeveloped properties in urban areas in the Kingdom, calling them ‘white lands’.
The new tax will amount to 2.5% of the total value of the land, held by individuals and non-governmental entities, and which is allocated to residential and commercial-residential use in urban areas, the ministry said in a statement via its Twitter account.
The tax aims to increase lands available for development to balance supply and demand, protect fair competition and fight monopolies as well as provide residential plots at suitable prices, it added.
Failure to pay the tax would result in fines reaching the amount of the tax owed, the ministry noted on Twitter, adding that revenues raised from the tax would be used for public services like roads, water, electricity and sewage systems at ministry housing projects.
Saudi Arabia first announced the land tax in November 2015, a major step in addressing the housing shortage that confronts many of its youth.
Analysts estimate that 40-50% of lands inside major cities are vacant and owned by wealthy individuals or companies that prefer to trade the land in return for speculative profits rather than develop it for housing.
