A longstanding issue for the Kingdom of Saudi Arabia has been the drag on the housing market caused by privately-owned property in urban locales that remains unused with no plans for development. Without taxation of this land, and low prices that owners might receive on the market, there is little incentive to sell it.
However, that may change according to a report by Reuters, which “could help to end a shortage of homes and spur economic growth.”
Reuters:
“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.”
Saudi Arabia’s Housing Minister, Shuwaish Al Duwaih, addressed the 150-member Shoura Council in Saudi Arabia on Monday and said that his ministry has “already presented a detailed study on the issue” of taxation, Arab News reports.
Al Duwaih also noted that authorities and the Saudi Real Estate Development Fund (REDF) would not see a reduction in funding due to falling oil prices.
According to Arab News, the REDF has granted “750,000 loans over the past 41 years including 195,000 during the past four years” and is seeking to chip away at the significantly long time it takes to get a loan in Saudi Arabia, from 16 years to 10 years.
