The Land and Property Tax bill is being redrafted in Thailand as it has not up to date. The new bill will be drafted with the Tax Department in mind as property values have changed over the years since the last changes. It has been proposed that the current tax ceiling is too low and needs to be adjusted to reflect the property market price increases. The tax rates which are being looked at is currently 0.05% on farmland, 0.1% on residential plots and 0.5% for commercial land.
Vacant land would be subject to a 0.5% tax rate, with the rate doubling every three years. To add to the increase in tax rates they are also looking as changing the current tax breaks which are being offered with the idea of a Land Bank also being scrapped as unworkable. The Land Bank idea was from the former government who had the idea of giving land to the landless by using property taxes for this purpose. Such a scheme was thought to be to much of a burden to be funded by property taxes. There has been a consultation period which was left for suggestions from the property sector and these had been reviewed. There is still much debate about the issue of higher property taxes on high-end property as the previous government had argued that the wealthy are not paying enough taxes in Thailand on their property and this is being filled by taxes on lower and middle income wage earners.
The Thai government hopes that this will not only fill the taxes coffers but also spread the taxes over a wider range of property owners. Only time will tell which way is next with property taxes in Thailand. If you need property tax advice, please contact us.