White land fees continue to dominate the economic environment and receive a large share of the media spotlight, and in the latest economic report expected the new land fee system in the Kingdom to stimulate the construction of more housing units for middle-income people and address the acute shortage of housing for this segment of Saudi citizens.

White land fees in the Kingdom will spur the construction of more housing units for middle-income people.

Suitable housing projects

The report issued by JLL Group revealed that the fee decision will push landowners to prepare their plans and build suitable residential projects to avoid the burden of holding unbuilt land, and other owners will seek to sell land to other real estate development companies, which will contribute to reducing land prices that have witnessed a sharp rise over the past few years.

The report issued by JLL Group revealed that the fee decision will push landowners to prepare their plans and build suitable residential projects to avoid bearing the burden of holding unbuilt land.

The report also predicts that lower land prices will boost the economic viability of new construction projects and real estate market activity, and revenues from new fees will allow the government to roll out several housing projects.

Radical change

Commenting on the new law, Jamil Ghaznavi, National Director and Head of JLL's Saudi Arabia office, said: "We expect to see a radical change in the Saudi real estate market once the new fees on unbuilt land come into effect, because real estate development companies will be the main players and landowners will start seriously considering options for partnerships to develop and build on their land."

Jameel Ghaznavi, national director and head of JLL's Saudi Arabia office, said.

Following the Shura Council's earlier endorsement of the draft White Land Fees Law, the Council of Ministers approved the project, and the speedy passage of the law demonstrates the importance that the highest levels of government attach to the need to address the current shortage of middle-income housing.

Housing and Infrastructure

The report said that although many details about the percentage of fees that the law will impose on white land have not been published (the Ministry of Housing has been tasked with issuing a detailed executive regulation to implement the law within six months), the following aspects of the system have now been approved: an annual tax of 2.5% of the value of white land will be imposed, and the fees will apply to all residential and residential/commercial land located within city limits.

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The proceeds of the fees will be deposited in a special account with the Saudi Monetary Agency to be used to finance housing and related infrastructure projects across the Kingdom. In addition, the law will enter into force six months after the Ministry of Housing issues the detailed regulations and regulations.

The law will enter into force six months after the date on which the Ministry of Housing issues the detailed regulations and regulations.

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Low land prices boost the economic viability of new construction projects.

Low land prices boost the economic viability of new construction projects.