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New Land and Buildings Bill

STLO Asia > News & Publications  > New Land and Buildings Bill

New Land and Buildings Bill

   On March 21st, 2017, the Thailand’s cabinet has approved the new land and buildings tax bill as recommended by the Ministry of Finance and proposed by the Office of the Council of State, and will further propose to the National Legislative Assembly of Thailand for the final approval. The bill is expected to be passed by the National Legislative Assembly by this September and it will become effective at the beginning of year 2017.

The principal purposes of the bill are to improve the tax imposition and structure, eliminate any defectiveness and reduce inequality of the current tax laws, and promote land use efficiently. The bill will replace the House and Land Tax Act B.E. 2475 (1932) and the Municipal Development Tax Act B.E. 2508 (1965) due to the reason that the said laws are outdated and incompatible with the current circumstances.

The tax will be levied on owners of land, buildings and condominium units, including persons who possess or use the government’s land or buildings with different tax rates depending on the use of land, buildings and condominium unit for agriculture, residence and other purposes, commercial or industrial, and unused or vacant land. The tax will apply to the official appraisal value of land, buildings and condominium unit.

Pursuant to the bill, the maximum tax rates for land, buildings and condominium units are as follows:

  • Tax rate for agricultural purposes (farming, is maximum 0.2 %;
  • Tax rate for residential purposes is maximum 0.5 %;
  • Tax rate for other purposes i.e. commercial purpose is maximum 2%; and
  • Tax rate for unused or vacant land is maximum 2 %. It is subject to increase by 0.5% in every three years and it is capped to not over at 5%.

The tax will be levied on a progressive rate basis at the rate as further announced separately by the royal decree. In addition to land and buildings used for agricultural purpose, if its official appraisal value is under THB 50 Million, it will be exempt from the tax. Tax exemption shall also be applied to land, buildings and condominium units used as the first main residence with a value of under THB 50 Million. Therefore the tax rate will be applied to land and buildings valued exceeding THB 50 Million and also apply to second residence and/or any additional residences on a progressive rate basis.

The certain types of property that are exempt from tax shall include property owned and used by the state, the crown property bureau, the Thai government, embassies, the United Nation, the Thai Red Cross, public infrastructure projects, and private property made available for public benefit.

Copyright © 2017, STLO Asia Ltd., All right reserved.

On March 21st, 2017, the Thailand’s cabinet has approved the new land and buildings tax bill as recommended by the Ministry of Finance and proposed by the Office of the Council of State, and will further propose to the National Legislative Assembly of Thailand for the final approval. The bill is expected to be passed by the National Legislative Assembly by this September and it will become effective at the beginning of year 2017.

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