The official appraised value of land in Thailand will now depend on its location, according to local media reports. This official appraised value is used to help determine what the owner will pay for the land and buildings tax.
The assessed value of buildings will not be subject to location and will be a flat rate throughout Thailand. Using location in this process would require the Treasury Department to hire appraisal advisers to evaluate the price of all buildings, something that would take too much time, says Chakkrit Parapuntakul, Director General of the Treasury Department.
The Treasury Department is currently conducting appraisals of land parcels with some 15 million plots still remaining. This process should be finished by the end of 2017. The new process of apprising prices for land plots is designed to make property tax evaluation fair, as there have been complaints in the past when it was doe by block area.
The official appraised value of land should be closer to real market prices since current appraisal prices are estimated to 20-30 per cent lower than market prices on average. Market prices use more factors to determine the value of a land plot and this why there can be discrepancy between the two.
“The method is fair and similar to land and building taxes in other countries as locations can have different value depending on the infrastructure in the area and the capacity for land prices to appreciate over time, unlike buildings, which tend to depreciate in value as they gets older,” says Issara Boonyoung, Honorary President of the Housing Business Association.
Experts have urged the government to educate the public on the difference between land tax and building tax since there is confusion between the two. One common misconception about the law is that owners will only pay tax on the land but not on the building.
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