A new tax on undeveloped lands, aiming to tackle the sharp housing decline in the kingdom, induced a 56.7% drop in real estate sales in Saudi Arabia, Arabian Business reported, citing the latest figures.
The kingdom recently imposed a 2.5% fee of the annual value of all undeveloped land on its owners, a controversial move that was met with questions over its efficacy.
The tax was levied with the aim of spurring developers to tackle the housing shortage in the kingdom.
However, experts told Arab News that the low demand on housing following the new regulation caused the drop in sales, as people preferred to wait for a real decline in prices before buying property.
The housing shortage was estimated to be at 1.5 million houses over the next seven years, according to Bloomberg.