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Riyadh City
The Saudi Cabinet approved on April 13, 2021, the amendment of the executive regulations of the idle land tax law, SPA reported.
The amendment includes three executive phases:
- The first phase focuses on undeveloped lands plots with an area of 10,000 square meters (sqm) or more, within the scope specified by the Ministry of Municipal, Rural Affairs, and Housing.
- The second phase includes developed lands plots with an area of 10,000 sqm or more, and those developed for one owner with an area of 10,000 sqm or more in one scheme within the ministry’s specified scope.
- The third phase is related to the developed land plots with an area of 5,000 sqm or more, and those developed for one owner with an area of 10,000 sqm or more in one city within the ministry’s specified scope.
The amendments included the possibility of applying more than one phase in one city. In addition, the ministry will conduct a periodic review for the situation in any city to decide on whether to apply tax on lands or suspend it or apply in one or more phases, in order to bypass a certain phase and move to the next one in the same city.
Minister of Municipal, Rural Affairs, and Housing, Majed Al-Hogail assured that this will reflect positively on citizens and the sector, in general, pointing to the encouraging impact that is achieved in the recent years following the idle land tax application in a number of cities.
The step will motivate the idle landowners to develop their lands, strengthen the real estate supply, and stimulate development of complete services in line with the objectives of the law, he added.
According to data compiled by Argaam, Saudi Arabia started levying the idle land tax on June 8, 2016, as Article 6 of the regulations included the application, according to the following phases:
- The first phase: undeveloped lands plots with an area of 10,000 sqm or more, which are within the ministry’s specified scope.
- The second phase: the developed lands plots belonging to one owner in a single approved scheme, as long as the total area exceeds 10,000 sqm.
- The third phase: the developed lands plots belonging to one owner in a single approved scheme, as long as the total area exceeds 5,000 sqm.
- The fourth phase: the developed lands plots belonging to one owner in one city, as long as the total area exceeds 10,000 sqm.
In case a certain phase does not apply to any of the cities, or the lands plots are not sufficient within a certain phase to achieve the required balance between supply and demand, it is permissible to skip this phase and move to the next one as per the Minister’s decision.
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