Saudi housing ministry initiates 2.5% land tax law
Revenues from owners who fail to develop projects on vacant lands would be spent on public services at state-funded residences, Saudi's housing ministry said
Hoping to catalyse the process of launching affordable private sector housing projects, Saudi's housing ministry has implemented the white land tax six months after the Cabinet first announced the initiative.
Undeveloped urban land will be subject to a 2.5% annual levy.
Major cities, such as Riyadh and Jeddah, are estimated to have between 40% and 50% of their buildable surfaces vacant.
These properties are traditionally owned by wealthy entities, individuals or companies, which have banked on low supply bringing prices up.
The ministry said on its website that failure to pay the tax could incur fines reaching the value of the levy itself.
Revenues from owners who fail to develop projects on vacant lands would be spent on public services like roads, water, electricity, and sewage systems at ministry housing projects, according to the website.
A government-backed mortgage scheme was recently announced as part of steps intended to provide housing to 100,000 low-income families.
Saudi Vision 2030 stipulates the plan to increase the rate of home ownership among its citizens to at least 52% by 2020, up from the current 47%.