Saudi property sales have plummeted by more than 50% as investors hold off due to the expected impact of a new land tax, according to press reports.
Total weekly sales fell 56.7% to SR1.9 billion ($506 million), the lowest weekly level in a decade, Arab News reported.
This was due to low demand as investors wait for an anticipated drop in prices due to a new tax on undeveloped urban land in Saudi Arabia.
Saudi Arabia’s cabinet in June approved the details of the tax, which applies to owners of vacant land in urban areas, and comes as part of an attempt to address the kingdom’s housing shortage.
Fees will first be applied to undeveloped land with an area of 10,000 square metres and more, and later apply to plots of more than 5,000 square metres.
The new tax is expected to spur development and help reduce property prices by up to 40%, according to reports.
