Saudi real estate market set for rebound leading GCC growth: Markaz

JEDDAH: Saudi Arabia has raised the annual fee on undeveloped land from 2.5 percent to up to 10 percent of property value, as part of Cabinet-approved reforms to address market imbalances. 

The amendments to the White Land Tax Law expand its scope for the first time to include levies on long-vacant buildings and revised land-size thresholds for taxation. 

The changes, ratified by the Cabinet on April 29, mark the most significant overhaul of the law since its inception in 2016. 

They come as part of a broader effort to accelerate development, counter speculation, and address supply-demand imbalances in the Kingdom’s real estate sector, which has seen mounting pressure in key cities such as Riyadh. 

The reforms support broader efforts to curb speculation, boost land utilization, and enhance access to affordable housing in line with Vision 2030.

In a post on his official X account, Minister of Municipal, Rural Affairs and Housing Majid Al-Hogail said: “The amendments included stimulating the use of vacant properties, and amending the targeted areas and the amount of the fee on undeveloped and developed vacant lands within the urban area, by up to 10 percent.”

The revised framework sets a minimum land area of 5,000 sq. meters for the application of the fee, covering both individual plots and contiguous holdings in designated urban areas. 

It also broadens the tax base to include vacant buildings — defined as ready-to-use buildings prepared for occupancy within the urban area that have not been used for a long period without acceptable justification, and whose lack of use or exploitation affects the availability of sufficient supply in the real estate market.

These vacant properties will now face an annual levy of up to 5 percent of their estimated rental value, as specified in forthcoming regulations.

The updated law introduces clearer criteria, phased implementation, and enhanced enforcement mechanisms, including grievance channels and unified property databases.

The Kingdom originally launched the White Land Tax Law to discourage land hoarding and promote more equitable development.

According to the Saudi Press Agency, Al-Hogail stated that the revised system is expected to enhance the efficient use of idle land and buildings, align supply with demand, and promote the productive use of real estate assets. It also seeks to encourage the development of undeveloped land and increase the overall availability of real estate, particularly residential properties.

Speaking to Al-Ekhbariya, Saif Al-Suwailem, spokesperson for the Ministry of Housing, said that the executive regulations for vacant property fees will outline the implementation mechanism.

The official added: “The amendments to the White Land Tax will enhance land use efficiency and stimulate the development of residential projects,” Al-Ekhbariya reported.

Moreover, he emphasized that amending the fees will have a clear and effective impact on enhancing supply and achieving real estate balance, noting that the system was completed in half the time.

The changes come as Saudi authorities intensify efforts to stabilize the housing market in cities like Riyadh, where surging land values and rental rates have strained affordability. 

A study by the Royal Commission for Riyadh City and the Council of Economic and Development Affairs recently prompted a series of measures, including lifting development restrictions in large swaths of northern Riyadh.

The government will issue executive regulations for the amended White Land Tax Law within 90 days of its publication in the official gazette. Regulations governing vacant property taxation are expected within one year, according to SPA.

RIYADH: Saudi Arabia’s minister of industry and mineral resources has urged Kuwaiti investors to seize untapped opportunities in the Kingdom’s mining sector.

The encouragement was given during Bandar Alkhorayef’s meeting on April 30 with a group of Kuwaiti businessmen at a gathering organized by the Saudi Embassy as part of the minister’s official visit to the Gulf country. 

The trip was designed to strengthen economic ties, enhance cooperation in the industrial and mining sectors, and attract high-quality investments to the Kingdom, according to a statement.

During his meeting with the investors, the minister highlighted the crucial contribution of the industrial and mining sectors to the Kingdom’s economic diversification, aligning with Saudi Vision 2030’s aim to establish the country as a global industrial leader and a key hub for mineral production and processing.

This aligns with developments across the Saudi mining sector in order to maximize its impact on the national economy and exploit mineral resources, estimated at more than SR9.3 trillion ($2.47 trillion), Alkhorayef noted.

“He pointed out that the National Industrial Strategy focuses on developing and localizing 12 vital industrial sectors, most notably food, pharmaceuticals, automotive, and aviation, as these sectors provide promising investment opportunities for local and international investors,” the newly released ministry statement said.

“His Excellency pointed out the Kingdom’s endeavor to enable industrial transformation by adopting the latest manufacturing technologies, including applications of the Fourth Industrial Revolution, developing digital infrastructure in the industrial sector, and developing human capabilities and qualifying them to deal with advanced technologies,” it added.

During the meeting, Alkhorayef highlighted the Kingdom’s launch of the Factories of the Future program, which aims to automate industrial facilities and transform them into smart factories.

The minister also indicated that the General Geological Survey Program for Mining Exploration currently covers 60 percent of the Arabian Shield region and that the sector offers promising investment opportunities in all stages of mining.

He highlighted Saudi Arabia’s strategic advantages that position it as a prime global investment hub, such as its location connecting three continents, advanced infrastructure, and abundant natural resources, as well as varied energy options and streamlined government processes and licensing.

Toward the end of the meeting, Alkhorayef encouraged Kuwaiti companies and investors to explore the distinctive opportunities in the Kingdom’s industrial and mining sectors, emphasizing the nation’s supportive capabilities and incentives designed to facilitate and enhance the investor experience.

Saudi Arabia, Kuwait to bolster collaboration in oil, commerce, industry

During his official visit to Kuwait, Alkhorayef also held bilateral meetings with the Minister of Commerce and Industry Khalifa Abdullah Al-Ajeel and the Minister of Oil Tariq Sulaiman Al-Roumi.

During the meeting with Al-Ajeel, the Saudi minister praised the longstanding and robust ties between the Kingdom and Kuwait, emphasizing that these historical relations serve as a solid foundation for strategic economic partnerships, particularly in the industrial sector.

The discussion also emphasized the need to bolster industrial integration between the two sides in order to advance sustainable industrial development and promote economic diversification in both nations.

The meeting with Sulaiman saw the crucial role of the crude oil sector highlighted as a key driver of development in both countries. It also explored strategic opportunities to expand collaboration in the petrochemical industry and discussed ways to increase trade exchange and direct joint investments toward emerging, high-potential sectors.

In an interview with Arab News on the sidelines of the Standard Incentives for the Industrial Sector event in January, Alkhorayef said that Saudi Arabia is taking a flexible approach to distributing its SR10 billion standardized incentive program — which provides financial support to industrial projects — to maximize its impact.

At the time, the minister said the program is designed to align with investor demand and deliver optimal returns.