New tax reduction for land and buildings comes into effect
published : 21 Mar 2023 at 04:09
newspaper section: Business
writer: Wichit Chantanusornsiri
A 15% reduction in the land and building tax has taken effect, says Fiscal Policy Office (FPO) director-general Pornchai Thiraveja.
The cabinet approved the decree cutting the tax in December last year.
The law was published in the Royal Gazette on March 18, taking effect on March 19.
The law applies to tax payments this year for land and buildings, including farmland, residential land, commercial land and vacant land.
For certain types of plots that were entitled to a 50% tax reduction under the previous decree, they will enjoy this 15% tax reduction on top of the 50% tax cut. This includes land for electricity-generating dams.
However, certain plots that enjoyed a 90% tax cut will not be entitled to the 15% tax reduction under this decree. They include allocated land plots for housing project development, which received the 90% tax cut for a maximum of three years.
This latest tax cut costs local authorities 6.28 billion baht, which the Budget Bureau will offset, Mr Pornchai said.
The government cut the land and building tax by 90% during 2020-21 to mitigate the impact of the pandemic.
The government did not extend the 90% tax reduction because of the fiscal burden.
The 90% tax cut took effect in June 2020.
From 2020 to 2021, the tax reduction cost the state around 30 billion baht per year, according to the FPO.
The current tax is based on step-up rates, which vary according to the value of the land and construction.
The tax ceiling on farmland is 0.15% and the effective rate is 0.01-0.1%. The landowner is exempt from the tax if they are individuals and the land price does not exceed 50 million baht.
The tax ceiling for residential land is 0.3% and the effective rate is 0.02-0.1%. Owners of first homes are exempt from property tax for land and buildings, up to a value of 50 million baht.
Land for commercial and industrial use and vacant land have a tax ceiling of 1.2%, and the effective rate is 0.3-0.7%.
- tax reduction