Built to inform

Sign up for the daily newsletters

No, Thank you

Saudi white land tax fears spur mass land sales

The tax is an effort to address a shortage in housing projects, increase transparency, and strengthen the tax system

NEWS, Business, Land prices, Property, Property sales, Real estate, Saudi, Saudi Arabia, White land tax

The impending implementation of the white land tax on undeveloped properties is casuing banks, companies and even the government to sell large parts of their property portfolios, sources told Arab News.

The fear is that real estate prices will dip by no less than 50% in the Kingdom.

Sales have gradually increased since the Saudi Cabinet's announcement of an annual tax of 2.5% on undeveloped urban land designated for residential or commercial use.

The tax is being implemented in an effort to address a shortage in housing projects, increase transparency and strengthen the tax system.

It has already resulted in a 25% drop in prices, Arab News added.

Academic and member of the Council of Saudi Chambers' real estate committee Ahmad Bakerman said there was currently great uncertainty in the market.

“It is difficult to determine which organisations and firms are selling their land, apart from the General Organization for Social Insurance (GOSI),” he said.

He added it was probably not wise for anyone to sell their land in the current climate, which has been characterised by considerable stagnation, too much supply and little demand.

Banks do not own property, but hold mortgages.  

When people do not pay their loans the banks are entitled to sell the property.

Those who fail to pay their loans only make up 1.5% of people with mortgages, according to the daily.

Most popular

Awards

Leaders in Construction KSA Awards to be held in Sep 2019
Gala ceremony in Riyadh to recognise and reward Saudi Arabia's best construction projects and brightest

Conferences

Leaders UAE 2019: Pinsent Masons confirmed as Gold Sponsor
Law firm is among the major construction industry players confirmed as sponsors for Leaders UAE's
Leaders in Construction UAE Summit returns in Sept 2019
Dubai conference to see top officials discuss the people, trends, and challenges that will power

Latest Issue

Construction Week - Issue 745
Jun 30, 2019