The cabinet has approved the cut of the tax on land and buildings by 90% of the amount due for the 2020 tax year to relieve people's burden, Prime Minister Prayut Chan-o-cha said.
The cabinet approved on Tuesday a royal decree on the cut as proposed by the Finance Ministry.
If the new rates under the new land and building tax act were imposed, people's problems would worsen from the sufferings they already had, he said.
The tax cut this year was also aimed at preventing adverse impacts on the payment of income tax next year, the prime minister said.
The government would help local administrative organisations, which will rely on the collection of land and building taxes for their own expenses, Gen Prayut said.
The decree aims to ease the impacts of the new 2020 land and buildings tax law, which was already promulgated and scheduled to come into effect in August. (see chart below)
Details of the decree show the cuts mainly benefit corporate owners of farmland, people who can afford more than one house, as well as owners of vacant land, or commercial/industrial properties.
This is because farmland owned by individuals is already tax-exempted for the first three years, or until 2022, under the 2020 land and building tax act. Only corporate owners are to pay less after the cuts.
Juristic persons owning farmland with the appraised value of 5 million baht normally pay 0.01% of the value under the existing law, or 500 baht. With the new cuts, they will now pay 50 baht.
The same also applies to residential use.
Under the existing law, first-home owners are already tax-exempted for the value of land and buildings up to 50 million baht, and 10 million baht if they only own the structures but not the land.
But for other houses they own, they will be taxed 0.02% or 1,000 baht under the existing law. With the new cuts, they will pay 100 baht.
Vacant land or commercial/industrial land and buildings with the appraised value of 5 million baht will be taxed 0.3% or 15,000 baht under the existing law. The owners will now have to pay 1,500 baht after the cuts.