A new joint venture between Saudi Arabia’s Ministry of Finance (MoF) and the Islamic Corporation for the Development of the Private Sector (ICD) has received approval to provide loans to low and middle-income Saudis, in what could be a much-needed boost for access to mortgages in the Kingdom.
The tax on undeveloped land would nudge property owners to build on these 'White Properties' that are often connected to roads and utilities. Without it, they have virtually no incentive to do so.
Saudi Arabia's Cabinet has instructed the Council of Economic Affairs and Development, lead by Mohammed bin Salman, to impose a tax on vacant plots of land in Saudi Arabia. This could jolt the Saudi housing market.
Saudi Arabia's Housing Minister Shwaish bin Saud Dhwaihi has been relieved of his post as minister of housing, following a royal order, according to reports.
He will be replaced Essam bin Saad bin Saeed, Minister of State.
Roughly five years after the launch of the Kingdom's National Transformation Plan (NTP), a key part of the Saudi Arabia's Vision 2030 social and economic masterplan, Saudi is seeing major initial progress in the real estate sector, with new residential mortgages soaring 1000% since 2016.
The Public Investment Fund-backed Saudi Real Estate Refinance Company (SRC) expects to issue its first public sukuk this year and a second private placement in the next two weeks, while developing further plans to finance an expansion of the kingdom’s home mortgage market, according to reports.
Riyadh’s unfinished King Abdullah Financial District (KAFD) located halfway between downtown Riyadh and King Fahd International Airport is headed for new ownership and a revised master plan.
Saudi Arabia's cabinet, in a meeting chaired by King Salman, imposed a 2.5 percent fee on undeveloped land within city limits intended for residential or commercial use, it announced in a statement on state media on Monday.
"The government has been considering for years whether to use taxes to push owners into developing or selling such land; last September the issue was referred to the Supreme Economic Council, a top policy body chaired by King Abdullah."
A royal decree calls for the Ministry of Municipal and Rural Affairs to turn over municipal land to the Ministry of Housing which will develop infrastructure such as roads on the properties before distributing them to citizens.
