Tax on unbuilt land: What will the new law 14-25 change?
Oriental Eco
On May 13, 2025, the Chamber of Deputies approved Bill No. 14.25 amending and supplementing Law No. 47.06 on territorial taxation. This reform is part of efforts to modernize the local tax system and keep pace with the requirements of territorial development.
Details of the amendments to the tax on unbuilt land
The new law made fundamental changes to the way unbuilt urban land is taxed, replacing the old system of two tax brackets with a new system of three brackets depending on the level of preparation of the area.
New tax brackets and their applications
Plots located in fully equipped areas (with basic infrastructure and services) are subject to a tax of between AED 15 and AED 30 per square meter. Plots in moderately equipped areas are subject to a tax of between AED 5 and AED 15 per square meter. Land in poorly equipped areas will be subject to a reduced tax of between AED 0.5 and AED 5 per square meter.
Mechanisms for zoning and tax collection
The classification of areas (fully equipped, moderately equipped, poorly equipped) is determined by a decision of the president of the communal council, which must be approved by the worker. The law explicitly states that the tax will not be levied if the amount owed is less than 200 dirhams, a threshold that remained the same under the previous system.
Comparison with the previous tax system
The old system of taxing unbuilt land was based on a simple division into two tranches: “condominium areas,” which ranged from Dh4 to Dh20 per square meter, and “villa areas,” which ranged from Dh2 to Dh12 per square meter. The minimum collection threshold (Dh200) remains unchanged.
Reforming the local tax collection system
The new law transfers the competence to collect certain local taxes from the Kingdom's Treasury Directorate to the General Directorate of Taxation. This transfer includes, in particular, the housing tax and the tax on collective services, while the professional tax was previously transferred to the DGT.
Deadlines and transitional procedures
The law gives a maximum of two months from the date of its publication in the Official Gazette to finalize the transfer of files and databases between the concerned administrations. Housing tax and collective services tax files will be transferred from the General Treasury to the General Directorate of Taxation, while other tax files will be transferred to the financial departments of the local authorities.
Tax Dispute Resolution
This transfer entails a change in the parties involved in settling tax disputes. The Director-General of Taxes will become the interested party instead of the Treasurer-General of the Kingdom in disputes related to the housing tax and the tax on collective services. The Collector of Collective Services will become the interested party in disputes related to other taxes.
