Landowners holding on to vacant lots are now more eager to sell this property due to the land and buildings tax that will come into effect in 2017. The new regulations will require the owners of vacant land to pay more in taxes should it sit dormant and property consultant Colliers International Thailand reported that many landowners are looking to unload this land before the year ends.
Colliers’ deputy managing director Sunchai Kooakachai said that there has been an increase in the number of landlords putting vacant plots up for sale during the first half of this year. A majority of these plots are located in eastern Bangkok in areas such as On Nut and Bang Na. With so many lots available, the market is now favorable for buyers after years of being a seller’s market.
“The top 50 wealthy families started looking for an opportunity to do something with their vacant plots after they learned the cost from the land and buildings tax,” said Sunchai. “Some of them asked us to sell their pieces of land.”
Landlords are now more willing to compromise on a selling price. Before this, they sought sums significantly higher than market prices and did not set any time limits for the sale creating conditions that were frustrating for buyers. In light of the new land and buildings tax about to take effect, these landowners are now pushing to close possible deals. The tax rate for vacant land will be one percent of its value during the first three years, two percent for the next years and three percent for each year after that.
“These families hold 30-40% of total land plots nationwide,” Sunchai stated. “Before they were alerted by the new tax, they normally called bids when they wanted to sell their plots, which took at least six months. Now they won’t wait so long.”
