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Draft Land and Buildings Tax Law

Published in T-AB Magazine Volume 5/2017

The Thai government has proposed changes to its land and buildings tax act. At present, Thailand has a ‘house and land tax’ of 12.5% of the assessed rental income or of the assessed value, whichever is higher, with an exemption for owneroccupied houses. The changes will include a provision to allow local authorities to appraise property values. The draft legislation has proposed the following new rates:

• Land for agricultural use - the ceiling rate will be 0.2% of the assessed value, with land valued at under Baht 50 million exempt from taxes, and 0.05% of the value for land assessed at a higher level.

• Land and buildings for residential use - the ceiling rate will be 0.5%, with owner-occupied houses exempt if valued at less than Baht 50 million, and 0.05% if assessed at a higher value.

• Land for other commercial uses - the ceiling is 2%, with the actual rate varying between 0.03% and 1.5%.

• Vacant or otherwise unused land - the ceiling rate is 5%, starting at 2% and increasing every three years by 0.05% until it reaches the ceiling rate.

• For buildings and condominiums, a nationwide rate of value per square meter set at Baht 7,200 to 7,800 for building.

• There will a depreciation allowance based on the nature of the material: for a concrete house, 24% of the original after 40 years; for a wooden house, the same rate after 18 years.

• Hotels will be valued at Baht 8,900 per square meter, and shopping malls at Baht 9,350 per square meter.

According to the Treasury Department, the appraisal of land plots throughout the country will be completed before the projected entry into force of the new law in January 2018. The Board of Investment (BOI) is still monitoring this, and cannot say at this stage if U.S. companies promoted by the BOI will be exempt from this new tax regime. The Bill has passed its first reading in the National Legislative Assembly (NLA).

For more information contact the Treasury Department.


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