Saudi Arabia’s recent decision to levy taxes on undeveloped land plots is likely to harm real estate companies in the kingdom, but will have a positive impact on cement and construction firms, according to a report by NCB Capital.
Cement and construction companies, however, will be supported by the decision which will narrow the gap between supply and demand of affordable houses. These companies include Saudi Ceramics, Shaker Group, Al-Khodari Sons Co, Zamil Group, and National Gypsum Co.
The size and scope of the impact will depend on the government’s definition of undeveloped land, and when the decision will be enacted, according to NCB Capital.
Earlier this week, the housing ministry suggested imposing taxes between SAR 10 to SAR 150 on each square meter of undeveloped land.
The existence of these plots— also known as white lands— is seen as a major contributor to the kingdom’s affordable housing shortage, which recently sparked a crisis that caused Saudi King Salman to replace the housing minister.
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