A number of Tadawul-listed companies declared the expected impact for implementing the updated regulation for idle land fees in Riyadh.
The total area of taxable land owned by companies that announced such impact so far reached nearly 4.2 million square meters. These companies are Dar Al Arkan Real Estate Development Co., Riyadh Development Co. (ARDCO) and Saudi Real Estate Co. (Al Akaria).
Meanwhile, four other companies announced that they do not expect a material impact from the implementation of the updated executive regulations of the Idle Land Tax.
Companies that Disclosed Expected Impact from Idle Land Fees
Company
Impact Details
Dar Al Arkan
The company said that, based on a preliminary assessment of properties within the designated geographical zones, about 2.65 million sqm of these land areas are located in north Riyadh, subject to a 5% levy. Another 181,000-sqm plots are classified under a 10% levy. Details
Riyadh Development
The company explained that the land subject to the tax includes:
1- a plot in the Ar Rimal district with an area of about 828,580 square meters (sqm), which falls under the fourth tranche at a 2.5% fee.
2- A plot in the Diriyah district with an area of around 18,500 sqm
3- A plot in the Al Malqa district covering 4,860 sqm, both subject to the first tranche at a 10% fee. Details
Al Akaria
Saudi Real Estate Co. (Al Akaria) disclosed that 487,840 square meters (sqm), or 4.65%, of its Riyadh land bank falls under the scope of the white land fee system, as follows:
The land plots subject to white land levies are 141,560 sqm are classified under Tier 1 (highest priority – 10%), comprising several projects under development, and 346,280 sqm under Tier 4 (lowest priority – 2.5%).Details
Retal Urban Development
The company said that no owned lands within the company’s portfolio in Riyadh fall under the scope of the White Land Tax.Details
Almajed Oud
The company said it does not expect a material impact on its financial position or operating plans from the implementation of the updated executive regulations of the Idle Land Tax. Details
Alandalus
The company said none of its owned lands in Riyadh fall under the scope of the White Land Tax.Details
First Avenue
The company said it owns no idle land plots.Details
According to Argaam data, the Ministry of Municipalities and Housing (MOMAH) last month announced the zones in Riyadh covered by the Idle Land Tax. Annual fees are set was follows:
–The first tier (highest priority): An annual fee of 10% of the land’s value.
–The second tier (high priority): An annual fee of 7.5%.
–The third tier (medium priority): An annual fee of 5%.
–The fourth tier (low priority): An annual fee of 2.5%.
–The fifth tier (outside development priorities) is exempt from annual fees, though the land is still counted as part of the owner’s total undeveloped holdings within the city.
The Idle Lands Program earlier released a clarification for the method of dealing with land owned by real estate developers or the land that is under development. The program said the fees will be mandatory for all owners, including real estate development firms, but will exclude state-owned properties. Land under development will be granted a one-year grace period from the date of fee imposition to complete construction and cancel the bill, with the option of an additional grace period under approved technical guidelines.
The land subject to the program in Riyadh includes residential, mixed-use residential-commercial, and commercial plots.
A number of Tadawul-listed companies declared the expected impact for implementing the updated regulation for idle land fees in Riyadh.
The total area of taxable land owned by companies that announced such impact so far reached nearly 4.2 million square meters. These companies are Dar Al Arkan Real Estate Development Co., Riyadh Development Co. (ARDCO) and Saudi Real Estate Co. (Al Akaria).
Meanwhile, four other companies announced that they do not expect a material impact from the implementation of the updated executive regulations of the Idle Land Tax.
Companies that Disclosed Expected Impact from Idle Land Fees
Company
Impact Details
Dar Al Arkan
The company said that, based on a preliminary assessment of properties within the designated geographical zones, about 2.65 million sqm of these land areas are located in north Riyadh, subject to a 5% levy. Another 181,000-sqm plots are classified under a 10% levy. Details
Riyadh Development
The company explained that the land subject to the tax includes:
1- a plot in the Ar Rimal district with an area of about 828,580 square meters (sqm), which falls under the fourth tranche at a 2.5% fee.
2- A plot in the Diriyah district with an area of around 18,500 sqm
3- A plot in the Al Malqa district covering 4,860 sqm, both subject to the first tranche at a 10% fee. Details
Al Akaria
Saudi Real Estate Co. (Al Akaria) disclosed that 487,840 square meters (sqm), or 4.65%, of its Riyadh land bank falls under the scope of the white land fee system, as follows:
The land plots subject to white land levies are 141,560 sqm are classified under Tier 1 (highest priority – 10%), comprising several projects under development, and 346,280 sqm under Tier 4 (lowest priority – 2.5%).Details
Retal Urban Development
The company said that no owned lands within the company’s portfolio in Riyadh fall under the scope of the White Land Tax.Details
Almajed Oud
The company said it does not expect a material impact on its financial position or operating plans from the implementation of the updated executive regulations of the Idle Land Tax. Details
Alandalus
The company said none of its owned lands in Riyadh fall under the scope of the White Land Tax.Details
First Avenue
The company said it owns no idle land plots.Details
According to Argaam data, the Ministry of Municipalities and Housing (MOMAH) last month announced the zones in Riyadh covered by the Idle Land Tax. Annual fees are set was follows:
–The first tier (highest priority): An annual fee of 10% of the land’s value.
–The second tier (high priority): An annual fee of 7.5%.
–The third tier (medium priority): An annual fee of 5%.
–The fourth tier (low priority): An annual fee of 2.5%.
–The fifth tier (outside development priorities) is exempt from annual fees, though the land is still counted as part of the owner’s total undeveloped holdings within the city.
The Idle Lands Program earlier released a clarification for the method of dealing with land owned by real estate developers or the land that is under development. The program said the fees will be mandatory for all owners, including real estate development firms, but will exclude state-owned properties. Land under development will be granted a one-year grace period from the date of fee imposition to complete construction and cancel the bill, with the option of an additional grace period under approved technical guidelines.
The land subject to the program in Riyadh includes residential, mixed-use residential-commercial, and commercial plots.
