The government will impose SR100 per square meter of white land falling under urban development plans. (SPA)

The government decision to impose fees on white land — the vacant lands located within city urban areas — paves way for reduction in housing costs as it will make vacant lands available for housing projects in planned areas.

The matter has been referred to the Shoura Council to consider giving relaxation of 30-days to white land owners.

The weekly Cabinet meeting here on Monday was briefed about the draft regulatory arrangements to impose fees on white land, which aims to reduce the cost of access to adequate housing for people with limited income and also generate revenues.

As per the provisions, the government will impose SR100 per square meter of white land falling under urban development plans.

The white land tax will levy a tax on residential lands of 10,000 square meters and more where all services have been completed.

Speaking to Arab News on Tuesday, Mohammed Alkhnessi, a Shoura Council member, confirmed about the matter having been referred to the Shoura Council for review, but he said: “the Council chairman has not yet received the final draft copy, and upon receiving, it will be discussed in the Council.”

He, however, was positive about the proposed duty on white land as it will pave the way for land availability which will reduce housing costs.

He said the proposed duty on white land includes only planned urban areas with basic amenities and not those that are unplanned, which are exempted from the duty on white land.

He added that bank loan facilities would also be extended to those working on housing projects on white land.

Saud M. Al-Suwaileh, former manager of the US-Saudi Business Council and an economic specialist working with the Ministry of Finance, said the new regulatory mechanism for white land will help curb prices and pump more developed land into the urban area in the housing market, and through construction development, turn it into residential housing.

He, however, expressed doubt if the white land owners were deliberately keeping the lands vacant to drive up prices, adding that the duties on the land value will raise the cost.

The government should therefore purchase white land and work on housing projects, especially for lower-income people, he said.

Earlier in March this year the Cabinet approved the recommendation of the Board of Economic Affairs and Development to impose fees on white land within the urban boundaries of cities and provincial centers.

Concurrent with the tax, it also approved a number of steps to restructure the real estate sector including the establishment of a real estate body and a project to build 1.5 million housing units in partnership with private sector developers with the aim of reducing housing costs.

The announcement of this real estate project is expected to achieve a qualitative leap in the housing sector with the proposed body protecting all beneficiaries including customers and investors.

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