Property tax figures finalised

Property tax figures finalised

New bill to go before cabinet in January

Land and buildings valued at more than 1 million baht will be subject to tax, with unused or vacant land to be charged at a progressive rate every three years but not exceeding a maximum level of 4% of the appraised value, according to the draft of the land and buildings tax bill.

The new bill, which is expected to go before the cabinet next January, has set maximum rates at 0.5% for land for agricultural use, not more than 1% for residential use and not more than 4% for land for commercial use, said Kritsada Jinavijarana, director-general of the Fiscal Policy Office (FPO).

The new property tax will come into force after the Treasury Department has completed the assessment of all existing 32 million land plots nationwide.

The department has already completed the assessment for 8 million plots.

The new land assessment value will serve as the base for the land and buildings tax.

The Treasury Department is expected to take about one and a half years to complete the assessment for overall land plots.

The law is expected to take effect sometime in 2016.

Mr Kritsada said land and buildings valued less than 1 million baht would be subject to tax waivers, while the effective rates for the new tax might be lower than the ceiling or maximum rate set.

The land and buildings tax is part of the government’s agenda to reduce economic inequality, improve land distribution and improve the use of land across the nation.

On Tuesday, the cabinet endorsed the draft bill for the inheritance tax that seeks to impose a 10% levy on bequests of more than 50 million baht.

The bill will be forwarded to the National Legislative Assembly for deliberation and take effect 90 days after publication in the Royal Gazette.

Taxable assets include residences, land, vehicles, bonds, equities and deposits at financial institutions. Non-registrable assets such as jewellery, amulets and luxury watches are excluded.

The inheritance tax will be levied on those who receive assets worth more than 50 million baht from a deceased person, while a gift tax, a parallel tax aimed at closing loopholes in the inheritance tax, is imposed when the donor dies within two years of a transfer of assets to a beneficiary.

The ceiling rate for gift tax, meanwhile, was set at 5% on bequests above 10 million baht.

Beneficiaries subject to tax include Thai citizens and non-Thai citizens who have domiciles or headquarters in Thailand for three consecutive years. The tax is also applied to non-Thai citizens whose inherited assets are in Thailand.

All assets donated to religious activities, universities or foundations for charity purposes will be exempt from tax payments. Assets inherited by wives or husbands after their spouse died will also be tax-free under the new regulations.

In another development, Mr Kritsada said the FPO believed the economy would manage growth of about 1.4% this year.

He said the recent National Economic and Social Development Board projection of only 1% growth this year did not take into account the government’s budget disbursement acceleration and 40-billion-baht cash handout to rice farmers.

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