Saudi Shura en­dorses a tax plan on un­de­vel­oped land

Kuwait Times - - BUSINESS -

DUBAI: Saudi Ara­bia’s Shura Coun­cil, the body that advises the gov­ern­ment on leg­is­la­tion, en­dorsed a tax on un­de­vel­oped land aimed at en­cour­ag­ing de­vel­op­ment and solv­ing a hous­ing cri­sis, the state-af­fil­i­ated Al Riyadh news­pa­per re­ported yes­ter­day. Fees will be im­posed as a per­cent­age of the land’s value, the leg­isla­tive body de­cided, re­ject­ing a cab­i­net pro­posal to limit fees to 100 riyals per square me­ter, the news­pa­per said. The leg­is­la­tion will be passed to the king this week for his ap­proval, it said, and the cab­i­net will set the date of im­ple­men­ta­tion.

Much ur­ban land in the king­dom is owned by wealthy in­di­vid­u­als or com­pa­nies which pre­fer hold­ing it as a store of value, or trad­ing it for spec­u­la­tive prof­its, to the process of de­vel­op­ing it. The tax could change that and spur home build­ing ac­tiv­ity. The gov­ern­ment has been con­sid­er­ing for years whether to use taxes to push own­ers into de­vel­op­ing or sell­ing such land. Many less well-off Saudis can­not buy their homes or af­ford ris­ing rents. Af­ter so­cial dis­con­tent prompted un­rest else­where in the Arab world in 2011, the then King Ab­dul­lah an­nounced a $67 bil­lion plan to build 500,000 homes over sev­eral years, but bu­reau­cracy as well as land short­ages have de­layed the scheme. —Reuters

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