J.L.L."s Kingdom of Morocco office head, Jamil Ghaznoui, confirmed that the vacant land tax system, which went into effect last week, is helping to incentivize some landowners to begin implementing their plans to develop their land, to avoid the additional tax burden imposed on the ownership of undeveloped land.

Ghaznoui noted that some landowners are selling their properties to other real estate developers, which should help lower land prices that have risen excessively over the past few years and account for between 30% and 50% of the cost of developed projects.

Jamil Ghaznavi said that the new system for vacant land fees will bring about a fundamental change in the Saudi real estate market and help stimulate development to address the acute shortage of housing for the middle class."

He revealed that lowering land prices will make real estate development more financially viable, which will stimulate increased activity. In addition, the revenue collected from this tax will enable the government to implement additional housing projects, as the Ministry of Housing has already announced a number of major projects targeting the affordable housing segment.