THE LAW FIRM OF HAZIM AL MADANI ATTORNEYS AND LEGAL CONSULTANTS
The Nature of Vacant Land and Its Significant Types
Initially, we would like to define what is meant by ‘vacant land’. This term refers to land that is either unutilized or neglected. Consequently, the government has taken several measures to address this issue by imposing fees on such land to encourage owners to develop and exploit it.
In 2016, the Cabinet approved charging fees on vacant land within cities and villages at a rate of 2.5% of the annual land value. Then, in 2020, a decision was issued to increase these fees to 5% annually.
Moreover, agricultural and residential lands are exempt from these fees, as the fees are directed toward land prepared for investment and developmental projects. A grace period of one year before the implementation of the fees was granted to give owners ample time to develop their lands.
We would like to point out that the primary objective of imposing these fees is to increase the real estate supply, lower prices, encourage investment and boost the wheel of real estate and economic development. However, some developers believe that the fees are high and may discourage some from investing.
The imposition of fees on vacant lands requires certain conditions, including:
- The land must be located within the urban boundaries of cities and populated areas.
- The land must not be exempt under any statutory provision.
- The land must be unutilized, neglected, and free from any structures or buildings.
- The land must have been owned for a period of 5 years without being utilized or developed.
- The land area must not be less than 1000 square meters.
On the other hand, there are some lands exempted from fees imposition, including:
- Undeveloped residential lands owned by individuals.
- Agricultural lands outside urban boundaries.
- Lands belonging to government bodies.
- Lands lacking basic services such as electricity, water, and roads.
- Lands subject to stop orders or pending legal cases.
In conclusion, vacant lands are one of the most critical issues facing urban development. These vast unutilized lands pose a burden on the state’s economy. Therefore, the government constantly addresses this issue by imposing fees on these lands. All these policies are a positive step towards achieving wealth distribution justice, promoting productive real estate investment, and reducing real estate speculation. Through these ongoing government efforts, the effectiveness and efficiency of these fee applications are ensured, leading to the elimination of the phenomenon of vacant lands and benefiting the national economy and the community as a whole.