Saudi Arabia To Enact Tax on Empty Land

March 24, 2015 Taxation in Saudi Arabia

RIYADH – Housing affordability in Saudi Arabia will soon improve, as the government sets out to enact a new tax on empty land being hoarded by developers.

On March 23rd the Cabinet of Saudi Arabia approved a new proposal to enact a tax on underdeveloped land which is suitable for urban development, a move which is intended to help address the country’s growing housing shortage.

Details are not yet available on the size of the tax or how it will be implemented, but the newly proposed measure is being considered as urgent, and all steps are being taken to implement the tax without delay.

Currently it is estimated that as many as half of the citizens of Saudi Arabia live in rented houses, and the rate of home ownership in the country is approximately half of the average rate in other OECD countries.

Large plots of developable land in Saudi Arabia remain unused as many wealthy property owners opt to let the land sit idle and accumulate value, instead of using it to construct new housing projects.

Photo By: Efren Rodriguez