Concerns Over New Thai Tax Bill

The Land and Construction Tax Bill that will be discussed by the Thai government later this year has had mixed reviews with many fearing that it won’t help the Thai residential property market.

The new bill on land and property tax in Thailand is aimed at helping property owners make better use of their real estate and properties, especially if they own land and property which is currently not in use. Some fear that the new proposals would see land grab opportunities where unused pieces of land would be leased to farmers for agriculture, particularly given the Thai government’s current drive to increase crop growth and to increase the amount of alternative energy sources.

In particular, residential owners believe that the Land and Construction Tax Bill may mean that Thai property owners will no longer see a tax exemption that they currently enjoy under current tax laws. Thailand property owners also believe that there may be an increase in property taxes as the current amount of tax collected through property is less than 10% of the total Thai government budget and it is believed that officials think property is an easy way to boost tax revenues.

There are plenty of other questions and issues which have Thai property owners worried. Apartment owners are currently unclear as to whether the new property proposals would have any affect on them. There are also queries as to how real estate and properties will be valued under any new tax laws, particularly if the real estate is split into part residential and part agricultural. If the law is not written clearly, there are concerns that some property owners will declare their real estate as different usage purposes or will deliberately split their land up to ensure they lower their property tax bill.

The law, will, however clear up some problems in the current system for example the way that the term ‘construction’ is defined. At present, the law is fairly unclear as to what the term construction defines and has led to the Thai Tax Court considering small buildings such as telephone booths as a construction.

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