Saudi land tax could 'generate $13bn-a-year'
Real estate experts say the imposition of land tax across Saudi's largest cities could provide up to $13bn worth of revenues for the government
Saudi Arabia's government has been urged to implement tax on all undeveloped plots of land across the Kingdom.
Real Estates experts say the imposition of land tax across Saudi's largest cities could provide up to $13bn (SAR50bn) worth of revenues of the government, Arabian Business reported.
The Kingdom's Shoura Council has approved a tax on undeveloped land aimed at encouraging development and solving the country's housing crisis.
Fees will be imposed as a percentage of the land's value, the legislative body decided, rejecting a cabinet proposal to limit fees to 100 Riyals per sqm, the state-affiliated Al Riyadh newspaper reported last week, as cited by Arabian Business.
"Mnay real estate owners will not be able to hold their land paying the tax, which will bring at least SAR50bn to the state coffers annually," real estate agent Mohammad Al Dossary said.
Meanwhile, realtor Mohammed Al-Faraj call for the tax to be implemented without delay.
He said: "The rise in prices was one of the main reasons that prevented citizens from having their own homes.
"The new law will make keeping plots of land unused for long periods unprofitable and force real estate owners to sell them to avoid taxation.
"When they start selling the prices will go down to reasonable levels."
Custodian of the Two Holy Mosques King Salman gave his intial approval of tha taxation move in March. Details including the time frame for the implementation have yet to be decided.
In 2013, the Housing Ministry estimated that 40% of the land in Riyadh was made up of empty plots, at a time when the state was spending billions building outside the cities.
However, Faraj said the introduction of the new tax was essential to end the monopoly of real estate investors.
He estimated white land in Riyadh city at 49 percent of the urban area, in Dammam 50 percent and Jeddah 40 percent.
The government has been considering for years whether to use taxes as a solution to bring down prices and help citizens own their own homes.