The Ministry of Housing of Saudi Arabia announced that it will be using the white land tax returns, which mounted up to around $6.6m, to build the infrastructure of a new government-initiated housing project.
The aforementioned project, situated north of the Saudi capital city Riyadh west of King Khaled International Airport, comes as another step towards meeting the high level of market demand on affordable housing.
The white land tax, which was imposed in 2016 on the undeveloped land plots in Saudi Arabia’s biggest cities including Riyadh, Jeddah, and Dammam, came as one of the Saudi Ministry of Housing’s approaches to increase fill the gap between demand and supply for mid-market housing.
This goal is being achieved through two methods, the first being using the generated revenues to fund the kingdom’s construction projects, while the second is urging the developers to develop these lands and, therefore, help filling the gap between demand and supply for affordable housing options on the other.
It is worth mentioning that, in 2018 the Saudi property market has hit its lowest point since the market’s peak in 2014.
However, local and regional developers, including Abu Dhabi-based Benghatti Developments and Sharja-based Arada Developments have expressed their confidence in the Saudi property market’s ability to bounce back through their recent announcements that they are going to open new sales offices in the Saudi cities within 2019.