In a bold move to curb land hoarding and stimulate real estate development, Saudi Arabia has increased its White Land Tax to 10%. The new rate marks a significant escalation from the previous 2.5%, signaling the kingdom’s determination to free up land for housing and infrastructure projects.
Approved by the Saudi Cabinet, the move also involves introducing an additional levy on long-vacant land with no justified use. This is aimed at owners allowing prime land to remain unused for long periods, fueling high land prices and slowed urban development.
Real estate reform is included in Saudi Vision 2030, the kingdom’s ambitious program to diversify the economy and enhance living standards. The tax will encourage more equitable land distribution, help fund affordable housing, and deter speculative activity which restricts supply in prime cities such as Riyadh and Jeddah, officials say.
Experts say the decision would propel a change in investment patterns, prompting developers to develop land more intensively. The owners of the land might see the financial blow, but overall the effect may be a more dynamic and more open property market throughout the kingdom.
