Saudi Gazette – In a landmark move to address the growing housing shortage and making homes more affordable, the Shoura Council on Tuesday approved a draft law to impose tax on undeveloped plots of land in urban areas.
The Council session, chaired by its President Sheikh Abdullah Al-Asheikh, endorsed the regulations called “the draft law to impose tax on vacant plots of land in urban areas.”
Yahya Al-Samaan, assistant president of the Council, said the draft law was approved after making some amendments in the law to impose taxes on unused plots of land in a phased manner under a time-bound plan.
He emphasized that the government of Custodian of the Two Holy Mosques King Salman does not want to impose this tax as a means to collect wealth or increase the state’s financial resources.
“On the other hand, it is part of the procedures to address the housing crisis in the Kingdom,” Al-Samaan said, adding that the time-bound program for imposing taxes and the phases of its imposition as well as other details of the law will be contained in the executive bylaw of the regulation.
Earlier, Council members were briefed on the report presented by the Shoura Committee for Haj, Housing and Services with regard to the tax proposal.
The report was prepared after taking into consideration the opinions and suggestions of the Council members during their deliberations in earlier sessions. The report was read out by the Committee Chairman Muhammad Al-Motairi.
The Council of Ministers on Oct. 19 ordered referring the proposal to impose tax on unused plots of land to the Shoura Council and instructed the consultative body to complete the studies within 30 days.
Earlier on March 23, the Cabinet gave the go ahead to impose tax on undeveloped plots of land in urban areas to tackle housing shortage for its young and growing population.
The Cabinet instructed the Council of Economic and Development Affairs (CEDA), chaired by Deputy Crown Prince Muhammad Bin Salman, second deputy premier and minister of defense, to prepare the required regulations in this regard.
Accordingly, the tax proposal was prepared under the supervision of CEDA to bring down the cost of land for building housing units for the low and limited income people.
Real estate stocks tumbled and construction stocks rose within one week after the Cabinet backed introducing the tax, which could help the government meet promises to build 500,000 new homes and ease a housing shortage.