The new law will assess taxes on land, property and buildings based on current valuations, and be applicable for landowners nationwide.

Only a few exceptions are allowed under the law, such as government agencies, Crown holdings, temples, international organisations or embassies.

Current law imposes a 12.5% tax on lease or rental income, with private residences for personal use exempted. Landowners also must pay a development tax based on valuations set in 1981, which in the vast majority of cases, well understates the actual market value of properties.

While the new tax law will become more encompassing in scope, the actual taxes paid by most homeowners are unlikely to rise significantly.

Dr Somchai said the Finance Ministry had set a ceiling for taxes to ensure parity or even reductions for some compared with current tax rates.

"As the tax base overall will expand, overall collections are expected to be higher," he said. The new law sets a ceiling at 0.1% of asset valuations for annual taxes.

Notable is the fact that actual rates will be set by local administrations, giving communities a say in setting a balance between tax burdens and revenue demands for local development purposes.

"Each community will have a choice. Those local politicians that impose high taxes could be voted out of office at the next election if the rates are unacceptable to the public," Dr Somchai said.

"On the other hand, if you set too low a rate, then it is the community that will suffer, by lacking the revenues to help develop local resources."

Local communities will be able to assess a separate tax for commercial properties as well, up to a maximum of 0.3%. Authorities say this will introduce a similar dynamic for community authorities, between raising funds for local development compared with the negative effects of imposing higher costs on local businesses.

Dr Somchai said another aspect of the new law was that the tax system would help reduce property speculation. Landowners who failed to develop properties for three consecutive years would see their tax rates double.

Overall, the Finance Ministry estimates that local administrations, who now collect some 20 billion baht per year nationwide from property taxes, should see their revenues double or triple to as high as 60 billion per year within 4-5 years under the new law.

"Yes, the new law will be a burden for some. There are people who have never paid property tax that will now have to do so," Dr Somchai said.

"But in principle, we believe that the rates are already very low, especially compared with other countries. And the new law will not impose taxes until one year after it is approved."