Panel woes delay land appraisal
New prices pushed back by one year
The Treasury Department has pushed back implementation of a new appraisal price for land by one year to 2021 after a hiccup in the formation of a new committee.
The delay in enforcement of the four-year land appraisal price, originally scheduled to start on Jan 1, 2020, will be a boon to landlords. The average new land appraisal price is 11% higher than the previous version, said Wilawan Veerakun, deputy director-general of the Treasury Department.
To comply with a new act on asset appraisal, which will take effect from Nov 22, a new land appraisal committee chaired by the finance permanent secretary must be established to enforce the new appraisal prices, but the panel has not been formed.
With the postponement, the current version of land appraisal price, meant to be in effect from 2016 to 2019, will be applied next year when the land and building tax takes effect, Ms Wilawan said.
The higher land appraisal price, which is used to compute property tax, typically leads to larger tax liability.
The land and buildings tax, scheduled to come into force from Jan 1, 2020, will replace the house and land tax and the local development tax, which have drawn criticism for being outdated.
For instance, land and buildings tax used for residences with appraisal prices of up to 50 million baht will be tax-exempt for principal homes, while those valued at 50-75 million baht will be taxed at 0.03%, 75-100 million baht at 0.05% and 100 million baht or above at 0.1%.
If owners have more than one home, the second and subsequent residences will be subject to 0.02% tax for those with an appraisal price of up to 50 million baht.
Tax rates will be applied the same as for principal homes for appraisal prices above 50 million baht. Principal homes are defined as residences for which the owners' names are listed on the household registration.
Ms Wilawan said farmland will be tax-exempt for the first three years to comply with a measure to alleviate tax burden for low-income rural landowners, while owners of land for other uses who are subject to higher property tax bills will be allowed to gradually phase in the increase each year, rising 25% each year over four years.
For example, a landlord liable for an additional tax payment of 1,000 baht after the land and buildings tax is enforced will be subject to a 250-baht incremental tax for the first year, 500 baht the second year, 750 baht the third and 1,000 baht from the fourth year.
With the tax alleviation measure, 99.96% of farmers nationwide will be free from the tax burden, leaving those who own 2,700 plots of farmland subject to the tax, Ms Wilawan said.