A ONE per cent tax could be imposed annually on the value of 1,000 square-metre plots of land not urbanised within five years of their purchase.
A proposed amendment to the 2013 Real Estate Registration Law seeking the introduction of the taxation was presented yesterday by five MPs led by Jalal Kadhem to Parliament Speaker Ahmed Al Musallam.
The aim of the move is to ensure quicker urban development in the country, while resolving the problem of limited space availability.
“Bahrain is an archipelago of 33 natural islands alongside several other man-made islands covering a distance of 161 kilometres and space of 765.3 square kilometres,” said Mr Al Kadhem.
“Knowing this fact, Bahrain has one of the smallest geographical spaces in the world and is the smallest Arab country,” he added.
“The lingering space limitations and population surge requires immediate legislative intervention.
“For this we propose a one per cent tax annually on the value of empty 1,000 square-metre plots that are not urbanised within a period of five years of purchase.
“This helps speed up urbanisation and provides a solution to the ongoing housing problem witnessed by people in the country.”
He claimed certain landlords, driven by greed, were keeping huge size plots empty for decades to sell them at a much higher price taking advantage of people’s needs.
“Saudi Arabia, which is the biggest country in the Gulf, despite huge available spaces has just introduced a similar rule to push ahead with the real estate flow and rejuvenate the market from getting stalled,” said Mr Kadhem.
“Here, certain landlords driven by greed were keeping huge size plots empty for decades to sell them for a much higher price taking advantage of people’s needs.
“We are not seeking to impose taxation to generate revenues for government coffers, but to ensure supply meets demand as the public is in need of homes and services, while lands sit idle.”
The size of an average plot available for homes is 300sqm with the price reaching up to BD100,000.
There are around 57,000 Bahraini families on the Housing and Urban Planning Ministry’s waiting lists.
Minister Amna Al Romaihi earlier told Parliament that there should be sufficient land to meet future needs, not just immediate or near future demands.
She added urban planning follows a progression as new generations come into existence.
The minister also told MPs last month that innovative, fair, fast and low-cost housing services were being constantly introduced to help push ahead with thousands of applications for homes.
“The conventional housing services are available for those wanting them but lengthy waiting periods currently are not up to people’s expectations,” she admitted.
She added that the government payment support towards housing services had increased from BD19,000 to BD40,000 and available loans had also increased from BD60,000 to BD70,000.
mohammed@gdnmedia.bh
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