The long-awaited land and buildings tax that won cabinet approval and is expected to generate more than 64 billion THB for government coffers when it takes effect next year.
According to Finance Minister Apisak Tantivorawong, 60 billion THB is to come from commercial buildings, 4 billion from residences and 50 million from agricultural land. All income will be used for local development.
The new tax is designed to expand the national taxpayer base, especially in assetbased taxation, with an aim to increase efficiency of tax collection among local organisations, narrow income disparity and improve land utilisation nationwide. The bill sets ceiling rates of 0.2% of appraisal value for land used for agricultural purposes, 0.5% for residences, 2% for commercial use and 5% for vacant or undeveloped land.
The tax will be levied on first homes and land used for agricultural purposes with appraisal prices starting at 50 million THB, with the rate applied to the amount exceeding 50 million THB. Owners of first homes and farms with an appraisal price below 50 million THB will be free from the tax liability.
The tax will also apply to second homes on a progressive basis, with rates of 0.03% to 0.30% for homes with an appraisal value of less than 5 million THB to more than 100 million THB. For vacant or undeveloped land, the tax rate will be imposed at 1% for land left vacant or unused for 1-3 years, 2% for 4-6 years and 3% for more than seven years. According to Mr Apisak, there are 8,556 residential units that have an appraisal price of more than 50 million THB, mostly in Bangkok and other big cities. That means about 99.96% of residences nationwide are free from the tax liability. – Bangkok Post