Property tax before cabinet

Property tax before cabinet

The long-delayed draft bill on the land and buildings tax will go before the cabinet for consideration tomorrow, permanent secretary for finance Somchai Sujjapongse says.

The bill sets tax ceiling rates at 0.2% of appraisal value for land used for agriculture, 0.5% for residences, 2% for commercial uses and 5% for undeveloped land, Mr Somchai said, adding that the actual levy rate will be announced later.

The tax will be levied only on homes and land used for agriculture with appraisal price starting from 50 million baht and will be taxed on the amount exceeding 50 million baht. That means owners of homes and farms with appraisal price below 50 million baht will free from the tax liability.

The tax will cost the payers around 1,000 baht per 1 million baht over 50 million.

For real estate companies, land banks awaiting development will be exempt from the tax for the first three to four years.

Mr Somchai said only 1% of farmers will have to pay tax as most of them own on average 30 rai of land each, worth only 1 million baht.

Moreover, the tax charged on residences will be progressive, so homes with appraised at 60 million baht will be taxed at a higher rate than those valued at 50 million. Common area in all housing projects will be exempt from tax.

The law is expected to come into force in 2017.

In a bid to reduce public opposition, the land and buildings tax rates were watered down several times. If approved, the tax will replace the existing house and land, and local development taxes.

The land and building tax is part of government effort to boost asset-based tax income to reduce economic inequality, improve land distribution and increase the use of land nationwide.

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