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Saudi agrees on 2.5% annual tax for undeveloped land

The decision will be active after six months, the council agreed, adding that the fees will be deposited in an account for the kingdom’s central bank

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The Saudi ministerial council in a meeting chaired by King Salman on Monday agreed on 2.5 percent annual tax for its undeveloped land in urban areas, Al Arabiya News Channel reported.

The decision will be active after six months, the council agreed, adding that the fees will be deposited in an account for the kingdom’s central bank, Saudi Arabian Monetary Agency (SAMA), to funnel other housing projects.

The money charged will be extracted from the value of the land after evaluation, it added, reflecting the recommendation of the kingdom's advisory Shura Council on Nov. 17.

Last week, Saudi Arabia’s Shura Council, the body that advises the government on legislation, endorsed a tax on undeveloped land aimed at encouraging development and solving a housing crisis.