Markaz discusses implications of new Kuwait property law
KUWAIT, April 21, 2024
In keeping with its commitment to empowering investors with vital perspectives and market insights for informed decision-making, Kuwait Financial Centre (Markaz) has released a research paper on the implications of the new Kuwaiti law to tackle the monopolisation of residential land.
Effective January 2026, the law imposes an annual fee of KD10 per sq m exceeding the individual limit of 1,500sq m of vacant residential land, with an increase of KD30 per sq m every year until it reaches KD100 per sq m.
Prepared by the Markaz Mena Real Estate team, the paper details the terms and conditions, as well as the consequences and possible responses related to the recently introduced legislation that restricts undeveloped residential land held by individuals.
The report outlines the anticipated actions of landholders in response to the new restrictions and the details of the fees imposed by the new law.
It also sheds light on the possible price fluctuations in the residential land sector and its overall consequence on the Kuwaiti real estate sector.
The report notes that the 'Anti-Monopoly Law on Land' is designed to curb feudal practices employed by traders.
These practices involve controlling the supply and pricing of residential land by acquiring extensive plots and keeping them unused for extended durations, intending to sell them at inflated prices during periods of scarcity in the residential land market, it stated.
As per Markaz’s report, landholders are likely to evade the fee by transferring their surplus land to their children. Since the law prohibits Special Purpose Vehicles (SPVs) from possessing private land, the report suggests that SPV-owned lands may be offloaded to circumvent the fee.
Additionally, the report examines various alternatives, such as selling the land, choosing to retain ownership and paying the fee, and developing a minimum area as strategies for landowners to adapt to the new legislation.
The regulation only applies to new landowners who have acquired over 1,500 sq m of unbuilt land after its implementation.
Individuals who currently own excess land will not be included in this law, says the report.
Noting that the law might not adequately address the prevailing housing problem, the Markaz report suggests other measures, such as increasing the supply of land or exploring other housing solutions through a modern common ownership law to develop quality residential units.
The research paper underscores Markaz’s unwavering keenness to keeping investors and clients informed of key laws and governmental reforms, offering crucial insights into how these changes impact individual investors and the real estate industry in Kuwait and the wider region.
It also highlights the proactive approach of Markaz's team in staying abreast of the latest market trends, industry updates, and newly enacted laws, it added.-TradeArabia News Service
