Saudi Shura endorses a tax plan on undeveloped land
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