The Finance Ministry is set to offer a grace period for the land and buildings tax to be levied on land banks held by property developers to prevent them from passing on costs to homebuyers.
The ministry has asked property developers to propose how long would be appropriate for the grace period, Deputy Finance Minister Wisut Srisuphan, adding that the grace period should be less than 10 years.
His comments came after property developers raised concerns that the proposed land and buildings tax, which is expected to be imposed in the coming years, would burden them.
They will need to possess a large land bank to develop property projects, eventually passing the cost through to consumers, the developers said.
The land and buildings tax is the second after the inheritance tax to be pushed by the government as it tries to reduce economic inequality.
The property tax is also expected to improve land distribution and land use nationwide.
The new bill, expected to go before the cabinet next month, sets maximum rates of 0.5% on land for agricultural use, 1% on land for residential use and 4% on land for commercial use.
Unused or vacant land would be charged at a progressive rate every three years but not exceeding a maximum level of 4% of appraised value.
Kritsada Jinavijarana, director-general of the Fiscal Policy Office, listed two options for the land and buildings levy on the land bank of property developers.
The choices are offering a grace period for a certain duration or imposing a charge of 0.5% of appraisal value.
The Finance Ministry is also considering raising the land and building tax exemption to property valued at 1.5 million baht or less from 1 million as stated in the tax bill.
The new property tax will come into force after the Treasury Department has completed its assessment of 30 million land plots nationwide.
So far, 7.8 million land plots have been assessed.
The new assessment values will serve as the basis for the land and buildings tax, with the law likely to take effect sometime in 2016.