Saudi Arabia’s cabinet approved on Monday new rules governing a tax on undeveloped land in the kingdom, also known as the white land tax.
Under the regulation, a 2.5 percent tax will be levied annually on the value of unused land designated for residential or commercial use, the cabinet said in a statement.
The fees will be applied in stages, first to owners of undeveloped plots exceeding 10,000 square meters in area, and eventually to owners of land plots over 5,000 square meters.
“The ministry of housing shall collect the applied fees in this regard as well as the fines imposed for violation of the rules or regulations, and take the necessary measures to prevent evasion of the payment of these fees and fines,” the statement said.
The measure is aimed at easing an affordable housing shortage in the country by incentivizing landowners to putting more land on the market for development.
The kingdom’s property market has remained stagnant in recent months as developers awaited more clarity on the land tax regulation.
Write to Jerusha Sequeira at jerusha.s@argaamnews.com
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