About 27 million square meters of Riyadh land has moved into development this year.
Nine months in, Riyadh's fees on idle land are starting to bite. Enough land for about 70,000 homes has moved into development.
About 27 million square meters of land has entered development, or finished the process, since the new fee rules took effect in January, Tariq Al-Shuhaib, general supervisor of the White Land Fees Program, said in an interview with Al Arabiya Business on Wednesday.
He expects that land to produce about 70,000 new homes in Riyadh over the next two to three years.
The new route: owners who put their whole plot into a real estate development fund, as an in-kind stake, can now pass the fee on to the fund. The fund then develops the land.
The new controls also list cases where land sales aren't restricted, and set out paths for owners and developers to keep projects moving.
Why it's needed: in August, the Cabinet closed a loophole that let owners sell land without settling the fees. Now a sale can't be registered until the fees are paid.
That left owners with three choices: develop the land, pay the fee, or settle up and sell. The fund route gives them a fourth.
How the fees work: owners can now be charged up to 10% of a plot's value every year, up from a flat 2.5% when the fees started in 2015. Vacant buildings are covered too. Riyadh received its first bills in January.
The goal is "to stimulate land development and keep more developed land flowing into the market," Al-Shuhaib said.
Why it matters: Riyadh's home prices have soared as land sat empty. More supply is the government's main tool for bringing them back to earth.
What to watch: how quickly those 70,000 homes reach the market, and whether more cities get the same treatment.
For more on how land values are moving, read Every Pilgrim Needs a Bed: Makkah Land Sells for Twice Its Value.
