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Saudi Arabian Government entity to deal with proposed tax on vacant land

Saudi Arabia’s Ministry of Housing (MoH) is planning to establish an operating company to manage the vacant land fees program.

Mohammad Al-Mdaihem, Head of the program, speaking during a seminar on the “Tax Law on Vacant Land,” noted that the company will be operational by the end of this year. The MoH will announce its decisions on land owner’s fee payments by December 2016.

According to Al-Mdaihem, the MoH is currently working on three related projects as well as the completion of the geographical information for Makkah and Madinah. He asserted that in Riyadh alone, there are 67,000 plots of vacant or unused land, with an area ranging from 200 to 1 million square meters. The three projects include:

  • Completion of an organizational structure
  • Database establishment
  • Implementation process commencement

Al-Mdaihem added that the MoH needs to conduct cadastral surveys to define the extent, value and ownership of land, all with the aim of providing services and utilities. The next step will involve opening all channels of information for citizens to be familiarized with the land assessment processes in accordance with the transparency principle.

The assessment phase will be followed by the billing process. The individual or body concerned will receive a letter from the Saudi Post containing details of the land owned. Al-Mdaihem stated that there would be an objection mechanism that provides for filing objections within 60 days of the issuance of the decision. The system also grants the MoH 60 days to respond.

On the matter of land encumbered by banks for mortgages, the fees may be imposed on the party holding the certificates of mortgage due to the absence of mortgage laws except for those of the Real Estate Development Fund.

Regarding urban lands in Dammam, he said, the remaining period to register was six months before the issuance of the decision, after which the land owner can object within a period of 60 days. Then the fees must be paid, or the owner will be granted a grace period of 12 months to develop the land.

EYG no. 01925-161Gbl

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