A progressive property tax looks set to be implemented in Thailand within several years instead of the originally proposed flat tax rate system, according to the Kingdom’s Finance Ministry. This will answer the hot topic on the lips on many: how much property and land tax will I have to pay under the new law?
Drawing controversy from many quarters, the Land and Tax bill is currently being amended, but it is expected to mean larger bills for people with more expensive properties and larger land holdings.
More than 30 million land plots currently need to be appraised by the Treasury Department, and the new property tax is not expected to be introduced into law until 2017 at the earliest.
Subject to government amendments, homes with an appraised value of THB 2 million or less would mean a THB 250 payment per THB 1 million value after a 75 percent allowance has been taken into account. It is not clear whether the allowance would only be available to end-user home-owning tax payers, or whether overseas buyers that have invested in Thailand would also be subjected to the tax.
Homes appraised between THB 2 million and THB 4 million would benefit from a 50 percent allowance and liable to pay THB 500 per THB 1 million in value. There is no allowance currently scheduled for homes valued at more than THB 4 million, and they will be subject to pay THB 1,000 for every THB 1 million in value. Therefore a home priced at THB 10 million would be subject to a property tax bill of THB 10,000 per year, under current plans that could still yet be amended by the tax reform committee, which meets later this month.
The full Thailand cabinet will then further consider the measures.
The Fiscal Policy Office is currently looking for measures to reduce the tax burden for those that inherit properties and may be forced to sell. It will also maintain the concept of separating land and buildings taxes into three types based on usage; agricultural, residential and commercial or vacant land.
Under the amended bill, the tax for unused land will likely have a lower starting rate but not exceed a maximum level of 2 percent of the appraised value, according to several media reports citing unnamed sources.
This story was written by Andrew Batt, Group Editor of Dot Property Group. Send your news, views, press releases and comments to him at [email protected].
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