Land Property Tax Act in Thailand
Starting from 2020 onwards, the Land Property Tax Act in Thailand will be updated to replace the outdated version. In a simple explanation, the change of the tax rate from the flat rate of 12.5% will be varied according to how the properties are being used and how many properties you have. It is important to take a look at the basics of the tax structure as one of the factors before you decide to purchase a particular residential unit.
In the past, unlike some neighboring countries, there was a tempting factor that attracts many new property or residence owners is that owner-occupied first properties are exempt from building and land taxes. However, the new tax system focus is on the immovable property and every owner of the land and/ or any permanent structure built upon the land will have to pay property tax.
The ceiling rate is 1.2%
Owner-occupied residences will not be exempted. There are 3 maximum tax rates depending on the use of the property and will be calculated over the appraised value of the property. The residential land property tax ceiling rate is 0.3%. First residential homes or first condominiums (only building owned by individuals) with the appraised value of equal or less than 40 million baht is at 0.02%. Residentials over 90 million baht is at 0.1%.
Some condominium buyers foresee these properties as a long term investment. As owning the property for commercial purposes (for rental) and future profit speculation (left vacant), the tax rate will be higher. The ceiling rate is 1.2%. For properties less than or equal to 50 million baht, the tax rate is at 0.3% and for properties over 5,000 million baht, the tax rate is at 0.7%. Yet, according to the news released from the Bangkok Post on December 31st, 2019, the government is being urged to delay the implementation of the new land property tax in order to give the local authority and taxpayers more time to prepare.
Asher Property Editor