Owners of buy-to-let residences in both low- and high-rise projects should feel more at ease after the Finance Ministry made clear that these properties will be taxed according to the second-home category in cases where more than one house is owned under the new land and buildings tax.
Buy-to-let homes will be considered for living purposes, said Prasong Poontaneat, the finance permanent secretary.
Homeowners, particularly those who own condominiums, were worried that their second homes would be classified for other purposes and be liable for a higher tax rate.
The Finance Ministry held discussions with related agencies and concluded that such homes, even those for rent, would be subject to the second-home tax rate.
The rate will be applied only to individuals who partly own some homes or condo units, while those who take over the entire residential project for rent will be subject to the property tax rate for other uses, Mr Prasong said.
Second homes will be taxed at 0.02% for homes with an appraisal price of up to 50 million baht, or 200 baht for every 1 million baht in appraised price. For homes classified for other uses, owners will be subject to a 0.3% tax rate for up to 50 million baht, or 3,000 baht for 1 million baht worth of appraised price.
Starting on New Year's Day, the new property tax regime will replace the house and land tax and the local development tax.
According to the new tax structure, land and buildings used for residences with appraisal prices of up to 50 million baht are tax-exempt for principal homes, while those valued at more than 50-75 million baht are taxed at 0.03% of appraisal prices, more than 75-100 million baht are taxed 0.05% and more than 100 million baht at 0.1%.
Those who only own houses, not land, qualify for a tax exemption for the first 10 million baht of their houses' appraisal prices. Residences with appraised value of more than 10-50 million baht are charged at 0.02%, more than 50-75 million baht at 0.03%, more than 75-100 million baht at 0.05% and more than 100 million baht at 0.1%.
If owners have more than one home, the second and subsequent residences are subject to a 0.02% tax for those with an appraisal price of up to 50 million baht, and the same tax rate as principal homes is applied to those with appraisal prices above 50 million baht.
Mr Prasong said the laws governing condominiums forbid their use for commercial purposes, with the exception of restaurants and convenience stores that are subject to the commercial-use tax rate.
Owners of land rented for farming purposes will be levied for agricultural purposes instead of commercial.
The land and building tax is aimed at encouraging landlords to use their land, and the tax should not burden taxpayers and those who are tasked with collecting taxes, Mr Prasong said.
He said all related agencies must raise public awareness about the new tax rates before the first payments start in August 2020.
The Interior Ministry recently announced that the payment period for the land and building tax would be delayed from April to August.