Meriem ABABSA, Chercheuse associée à l'Institut français du Proche-Orient et au CAREP Paris, consultante, France
Arab cities are suffering from a rampant housing crisis. About 40% of the apartments are built informally, either vertically or on agricultural land. In the absence of taxation on vacant land, speculation is rife and makes land unaffordable for two-thirds of citizens. Land has become an investment vehicle for social actors who want to increase its value to protect themselves from the negative effects of inflation.
Land accounts for more than half of the price of apartments on the formal market. In the absence of adequate fiscal instruments (e.g., taxation of capital gains and vacant land) and appropriate housing policies, land prices are rising faster than incomes and construction costs, making apartments unaffordable for modest households. Only the middle and upper classes (the last three income deciles) can use mortgages to access apartments in the formal sector, the cost of which now absorbs between seven and ten years of their income in Jordan, but fourteen in Cairo. Most Middle Eastern countries are struggling to create social housing policies. No affordable rental sector exists. Subsidized housing policies are based on the purchase of public land, usually on the outskirts of cities.
In this context, Saudi Arabia is an exception. On the advice of the World Bank, it introduced a white land tax in 2015 to tax its vacant urban land in order to counter land/property speculation and thus finance its social housing policies. It came into force in June 2016 and is set at the high level of 2.5% of the market value of the land.
The objective of this article is to present an innovative policy . It draws on sources in Arabic and English produced by consulting firms, the World Bank, and the press. It shows that the tax alone does not make it possible to finance housing policies, but is a major tool for more compact urban planning. Above all, it serves as a model for neighboring countries (in particular Jordan and Egypt).
Mots clés : land speculation|vacant land taxation|social housing|World Bank|Middle East
A103762MA