Land and buildings tax to get chop
Cabinet approves 90% rate reduction
The cabinet yesterday approved a sharp cut in the land and buildings tax of up to 90% for this fiscal year, the latest move to alleviate fallout from the coronavirus pandemic.
Prime Minister Prayut Chan-o-cha said the overall public will be hit harder if the government proceeds with plans to fully levy the land and buildings tax in August.
The new land and buildings tax took effect at the start of this year and collections were scheduled to begin in April. The government later delayed enforcement until August to give local authorities and taxpayers more time to prepare.
The tax applies to residences, farmland, commercial areas and undeveloped land. The rates vary depending on how the property is used.
The current structure sees land and buildings used for residences with appraisal prices of up to 50 million baht exempt for principal homes, while those valued at more than 50-75 million baht are taxed at 0.03% of appraisal price, more than 75-100 million baht at 0.05% and more than 100 million baht at 0.1%.
Those who own only houses, not land, qualify for a tax exemption for the first 10 million baht of their houses' appraisal prices.
Residences with an appraised value of more than 10-50 million baht are charged 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 for principal homes is applied for those with appraisal prices above 50 million baht.
The prime minister acknowledged that the lower land and buildings tax rates will affect the revenue collection of local administrative organisations. The government will have to look at compensation later, he said.
At an April 20 meeting of Gen Prayut's advisory committee, the private sector proposed the government put off the land and buildings tax for a year, saying the economic situation was too fragile to start collection in August.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries, said earlier that the land and buildings tax would need to be postponed because individuals and businesses were in no position to pay the tax amid the pandemic.
Traisuree Taisaranakul, a deputy government spokeswoman, said local administrative organisations are expected to lose 39.2 billion baht from the sharp cut in the tax.