Middle East: Saudi Arabia plans to tax undeveloped land

Middle East: Saudi Arabia plans to tax undeveloped land
  • United Kingdom
  • Middle East
  • Saudi Arabia
  • Energy and infrastructure - Clean energy


Saudi Arabia has recently announced that it plans to levy fees against vacant land in urban areas throughout the Kingdom. Until this point, Saudi Arabia has been largely tax-free, especially with regard to real estate.

The aim of this initiative is to encourage development of urban areas within the Kingdom. Development is currently slow and unappealing largely due to the cost of purchasing the land in the first instance. The cost of the land can comprise as much as 50% of the total project costs, which is due largely to vast areas of prime real estate being stockpiled by wealthy individuals and Companies with no intention of developing the land but simply holding onto the land as a store of value.

This proposal is in very early stages and the true impact will fundamentally depend on the level of taxation which is imposed.