Taiba Investment Company, a leading real estate development company listed on the Saudi Stock Exchange, announced that it received several invoices on January 1st related to vacant land fees for plots of land it owns in Riyadh. The total value of these invoices amounted to approximately SAR 2.96 million, as part of the current phase of the government fees program.
In an official statement published on the Saudi Stock Exchange (Tadawul) website on Thursday, the company clarified that it is handling these invoices in accordance with the regulations, rules, and procedures followed in the Kingdom. The company's management confirmed that it is currently conducting in-depth and comprehensive feasibility studies aimed at determining the optimal use of these lands, ensuring their conversion into development projects that generate profitable returns and serve the company's interests while maximizing shareholder value in the long term. Taiba also indicated that the financial impact of these fees will be addressed and accounted for in accordance with the accounting standards adopted in the Kingdom of Saudi Arabia.
Context and objectives of the White Land Fees Program
This announcement comes as part of the ongoing efforts of the Ministry of Municipal and Rural Affairs and Housing in the Kingdom of Saudi Arabia to implement the White Land Tax system, a cornerstone of regulating the real estate sector. The program primarily aims to increase the supply of developed land to achieve a balance between supply and demand, provide affordable residential land, and protect fair competition while combating monopolistic land practices within the urban boundaries of major cities.
The program has gone through several implementation phases, including major cities such as Riyadh, Jeddah, Dammam and Mecca, where annual fees are imposed on undeveloped land located within the specified urban area, in order to encourage its owners to either develop it or sell it, which contributes to injecting more housing units into the market.
Expected economic and developmental impact
Economically, this measure is expected to push Taiba Investment Company and other major real estate firms to accelerate the pace of real estate development in Riyadh. Instead of holding land as raw assets, these assets will be transformed into vital projects that contribute to the urban renaissance the Kingdom is witnessing, in line with the objectives of Saudi Vision 2030. This shift not only strengthens the companies' financial position by generating sustainable operating revenues instead of paying fees, but also contributes to stimulating the economic cycle of the contracting and construction sector, creating new job opportunities, and meeting the growing demand for real estate in Riyadh, which is preparing for major global events in the coming years.
