Tag Archive: building

  1. New Land and Building Legislation in 2020

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    After an extensive legislative process, the National Legislative Assembly (NLA) has recently passed the new Land and Building Act (the “Act) comprising 94 Sections and introducing a new system on property taxation. With its announcement in the Royal Gazette, the Act will replace the old and outdated Land and House Tax Act B.E. 2475 (1932).

    The new system on property taxation includes a legal ceiling rate which depends on the category and the appraised value of the land; a tax exemption might be granted in specific cases:

    • Legal ceiling rate for residences: 0,3 % / tax exemptions for first homes
    • Legal ceiling rate for agricultural land: 0,15 % / tax exemption for agricultural land held by individuals
    • Legal ceiling rate for other purposes: 1,2 %
    • Legal ceiling rate for undeveloped land: 1,2 %

    The rates above show the maximum rates under the Act only. Again, the final tax rate is based on the land category and the appraised value of the land. These rates will be increased by 0,3 % every three years. However, the ceiling rate of 3 % will be not exceeded.

    The tax collection will start in 2020. According to Deputy Finance Minister Wisudhi Srisuphan, the new system will stimulate the economy and the budget will help the local administrations to enhance the development of their areas.

  2. New Land and Building Tax Act

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    On 7th of June 2016, the new Land and Building Tax Act (the “Act”) was formally enacted. The Act will likely become effective in early 2019 and will be replace the existing and old Land and House Tax Act B.E. 2475 (1932) and the Local Development Tax B.E. 2508 (1965).
    The new law will introduce an entirely new system of property taxation. While the previous system focused on gains derived from property, going forward an annual tax payment for the property as such will be implemented. This will likely increase the tax burden for owners of larger land areas and for land banking.
    Under the Act, tax payer is the
    1) Owner of land and structures;
    2) Owner of condominium; and
    3) Possessor or beneficiary of land or structures on government property.
    The maximum tax rates vary, depending on the type of occupancy of land and structures:

    table-1

    Above rate represents the maximum rates under the Act, the actual tax rate will be set forth by royal decree.
    Please see more detailed stipulations of the tax rates as follows:

    1. Lands and structures for agriculture and the first residence

    table-2

    2. Land and structures for other residence

    table-3

    3. Land and structures for other use (Commerce, industry, etc.)

    table-4

    4. Vacant land

    Tax rate will increase every 3 years for support land owner develop their land.

    table-5

    Again, the above rates represent the maximum rates under the Act, the actual tax rates will be set forth specifically.

    5. Tax holiday

    Following properties are exempted or relieved from the new tax:

     

    table-6

    The tax burden will be calculated on the basis of the value of land and structure (according to the Land Department index values):

     

    Tax Burden                   = (Value of land + Value of structure) * Tax Rate

    Value of Land               = Estimated value of Land  * Area

    Value of Structure        = [Estimated value of structure * Area] – Depreciated Value

     

    Please feel free to contact us if you have any inquiries regarding the above: [email protected]

  3. Cabinet approves land and building tax

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    According to a report by Bangkok Post, the Cabinet has approved the draft law on land and building tax on 7 July 2016. The law is currently in the process of legislation and will likely take effect in early 2019. The tax applies to land, buildings and condominium units. A first home valued below 50 million Baht will be exempted from tax, while a maximum 0.5 % rate will be applied to a second home or first home appraised above 50 million Baht and a maximum 0.2 % rate will be levied on agricultural land and 2 % on commercial and industrial land. For undeveloped land, the maximum rate of 5% will apply in the first three years and the rate will be doubled if the land remains vacant in the following three years.

    Sources: http://www.bangkokpost.com/business/news/1004021/cabinet-approves-land-and-building-tax

     

  4. Building Ownership in Thailand

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    In our practice we often see that there is a great deal of confusion among foreigners in Thailand regarding the legalities of owning a house. Please see the below article (published in Samui Phangan Real Estate Magazine) which provides some information and clarification:

    Samui Phang RE - Building Ownership
    (more…)

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