What about second homes in the wifes name?


Under the new law, first home valued below Bt50 million

Read more: bigmango.boards.net/thread/5685/thailand-land-tax-bill-approved#ixzz4Au29gO00

Glad to see that personal residencies will be waived for most people - for now at least

New property tax ceiling gives rich too much room

At first glance the new draft bill for property tax seems to correct an overly generous regime for wealthy homeowners. But looks are deceptive here.

Steered through Cabinet last week by Deputy Prime Minister Somkid Jatusripitak, who is responsible for economic affairs, the land and buildings tax bill will levy rates of up to 5 per cent on undeveloped plots and 2 per cent annually on land and buildings used for commercial and farming purposes.

In this respect the new law is progressive, promising to deliver more public revenue from taxation applied in a more fair and equitable fashion than the current, obsolete regime.

But a startling feature of the new law is the generous provision on tax exemption for first-time house buyers. No tax need be paid on the purchase of properties valued up to Bt50 million, which is where the "prosperity line" has been set.

Under the previous property tax bill that line was set at houses worth just a few million baht.

Now, incredibly, owners of a house and land worth Bt50 million won't need to pay a penny in property tax into government coffers for national development.

In addition, since the law decrees that second-time house buyers get no tax exemption, the gap between rich and poor could widen: A person with one house worth Bt50 million would pay nothing whereas someone with, say, two Bt5-million houses would be subject to tax. Why should a person with property worth Bt10 million be taxed while someone with property worth Bt50 million is exempt?

One question being asked by authorities in a bid to gain public support for the new bill is, "Would you like to see a fairer tax regime that places more burden on the rich?"

The Agency for Real Estate Affairs, an independent consultancy firm, reports that Thailand has just 1,351 homes worth Bt50 million or more, of which 572 units are detached houses and 764 are condominiums. They represent only 0.007 per cent of the total 4.7 million registered units.

Imagine that the tax exemption ceiling were dropped from Bt50 million to, for example, Bt10 million, and you get a sense of the amount of tax revenue we lose under the proposed system.

Meanwhile though it seems the government will be able to collect more tax on undeveloped land, that picture could be deceptive too.

The maximum rate to be imposed on undeveloped land is 5 per cent for the first three years, then double that from year 4-6. Meanwhile farmland is subject to a maximum rate of 0.2 per cent.

If the ceiling for tax exemption on houses is too high, we might see owners of undeveloped land exploit a loophole by placing houses on the land to reap the benefit of the 0.5 per cent maximum tax rate against 5 per cent or more.

The bill will now be sent to the National Legislative Assembly for its consideration. Hopefully, its members will do the right thing and drop the ceiling for tax exemption.

From the Nation: www.nationmultimedia.com/politics/New-property-tax-ceiling-gives-rich-too-much-room-30288379.html

New land tax gets closer

Levy on real estate gains from state projects


The land development tax would be a one-off levy imposed on owners selling or transferring real estate whose value has been boosted by nearby infrastructure projects, a source at the Finance Ministry says.

The tax will not be implemented retroactively, so land along infrastructure projects that are completed before the tax comes into effect will not be subject to it, the source added.

Property owners will only have to pay the tax when the real estate is sold or changes hands, the source said, adding that the levy could be imposed on the difference between the Treasury Department's appraisal prices before and after the construction of such projects.

For instance, if a property's appraisal price stood at 1 million baht prior to the construction of a project and the price shot up to 5 million after construction, the owner(s) would be subject to a levy on the additional 4 million baht in value when the property is sold or transferred.

The land development tax, commonly known as a betterment tax, is part of the Finance Ministry's efforts to seek new sources of tax revenue to boost the government's coffers and diversify its tax structure, which now relies heavily on income tax and value-added tax. Apart from the land development tax, other taxes on assets that have been pushed by the current government include an inheritance tax, a gift tax and the land and buildings tax.

The source said Finance Minister Apisak Tantivorawong has urged the Fiscal Policy Office (FPO) to speed up drafting of the land development tax to accommodate the government's eight-year large-scale infrastructure development plan.

The FPO is currently studying betterment taxes that have been implemented abroad, the source said, adding that the tax has been temporarily applied in some countries, while it was made permanent in others.

Thailand could choose to tax real estate whose price has been inflated from infrastructure development only once, meaning the property would not be subject to the tax again if it is sold or transferred in the future, the source said. (why the f not?)

The source further said that not everyone who owns real estate near infrastructure projects would have to pay the tax, as the draft bill would set a radius determining who is liable. Those who own land outside the set distance would be free from the tax, even though their property prices would get a boost from the infrastructure development, the source said.

property.bangkokpost.com/news/1078548/new-land-tax-gets-closer