Saudi to issue sukuk for real estate fund: minister – Govt to announce final tax rules on undeveloped land

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JEDDAH, Saudi Arabia, June 9, (RTRS): Saudi Arabia plans to issue an Islamic bond, or sukuk, for its Real Estate Development Fund by the end of 2017/2018, the housing minister said on Wednesday.

“The sukuk programme is specialised for the real estate development fund,” Majed al-Hogail said at a press conference.

The fund is the largest financer for the Saudi real estate sector and has a portfolio of around 190 billion Saudi riyals ($50.67 billion), the minister said.

“We believe we can get cash flow from issuing sukuk for these loans and getting money to deal with the fund’s waiting list in the fastest time possible,” he said.

Meanwhile, Saudi Arabia will announce the final regulations on an annual tax on undeveloped urban land in two weeks, the housing minister said on Wednesday.

“Land fees are now complete and have been studied by all concerned entities and within the next two weeks we will announce it,” Majed al-Hogail said at a press conference.

The ministry has said the new tax would be equivalent to 2.5 percent of the value of the land held by individuals or non-government entities.

The introduction of a land tax, first announced by the cabinet in November, marks a big step for the world’s top oil exporting country in addressing a housing shortage frequently griped about by young Saudis.

Analysts estimate that 40 to 50 percent of the land inside major cities remains vacant, much of it owned by wealthy individuals or companies that have tended to hold or trade it for speculative profits rather than developing it for housing.

Also:

JEDDAH: Saudi Arabia’s Economy and Planning Minister Adel Fakieh said on Wednesday that the kingdom could live comfortably with oil prices even as low as they were late last year.

“We believe that we will comfortably live with the prices that the market has been experiencing even last year, at the end of last year the prices were much worse than now,” he said when asked if a particular oil price band was needed for sweeping Saudi economic reforms to work.

“This is a very effective plan,” he added, referring to the planned reforms. Brent crude was trading in the low $40s a barrel in December 2015.

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