The proposed changes to the land and buildings tax have been delayed for several months now but the draft bill will soon go before the cabinet for consideration, permanent secretary for finance Somchai Sujjapongse told the Bangkok Post. The alterations to the land and buildings tax rates have been amended several times after meeting criticism from the general public when first announced.
The new bill will set tax ceiling rates at 0.2 percent of appraised value for land used for agriculture, 0.5 percent for residences, two percent for commercial use and five percent for undeveloped land, the Bangkok Post noted. If the measure is approved by the government, the new tax will replace the existing house and land and local development taxes.
The new tax will be levied only on homes with an appraisal price starting at THB50 million and will be taxed on the amount exceeding THB50 million, the newspaper added. Homeowners with properties below an appraisal price of THB50 million will have no tax liability under the proposed measures. The taxpayers owning homes above that mark will have to pay around THB1,000 per THB1 million over THB50 million threshold.
Real estate companies and land banks awaiting development are expected to be exempt from paying the tax during the first three to four years it is in effect. The tax will also be progressive meaning the amount charged on residences will depend on the overall value. For example, a house appraised at THB60 million will be taxed at a higher rate than one appraised at THB50 million. Common areas at a housing complex will be exempt from tax, according to the Post.
If approved the law will take effect some time in 2017. The government is hoping the new land and building tax helps increase asset-based tax income and reduces economic inequality in Thailand. The measure also aims to improve land distribution and increase the use of land nationwide.
