Riyadh Development outlines land subject to Idle Land Tax

Saudi government defines Idle Land Tax in Riyadh, ranging from 2.5% to 10% based on priority zones

Riyadh Development Co. (ARDCO) disclosed details of its land holdings subject to the Idle Land Tax Law, after the Ministry of Municipal and Rural Affairs and Housing issued updated executive regulations.

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In a filing to Tadawul, the company said the disclosure reflects its commitment to transparency and compliance with regulations.

The company explained that the land subject to the tax includes a plot in the Ar Rimal district with an area of about 828,580 square meters (sqm), which falls under the fourth tranche at a 2.5% fee. It also includes a plot in the Diriyah district with an area of around 18,500 sqm and a plot in the Al Malqa district covering 4,860 sqm, both subject to the first tranche at a 10% fee.

ARDCO noted that assets held through real estate investment funds licensed by the Capital Market Authority are excluded, since the fund manager is responsible for handling the financial impact. It added that the financial impact of the tax will be disclosed in due course.

According to Argaam data, the ministry announced last month the geographical zones in Riyadh subject to the Idle Land Tax. The annual fee is set at 10% of land value for the first tranche, 7.5% for the second, 5% for the third, and 2.5% for the fourth. Land in the fifth tranche, which lies outside priority zones, is not subject to the annual tax but is counted within undeveloped plots owned by the taxpayer.