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Property associations urge changes to some fees

By on Aug 14, 2014 in Property News

THREE PROPERTY associations will propose that the Finance Ministry revise all current taxes and fees in the property sector to match the Land and Construction Act, which is being considered by the National Council for Peace and Order (NCPO).

The Thai Real Estate Association, Housing Business Association and Thai Condominium Association plan to send a draft of their proposals to the ministry today.

Last month, the ministry proposed to the NCPO two acts to cover inheritance tax and a land and construction tax. The stated aim of this legislation is fairness for Thai society. Similar bills have been proposed before but previous elected governments failed to make pass such laws because of opposition from wealthy landlords.

“If the Finance Ministry wants a law governing land and construction tax, it has to revise other fees and taxes that landowners, property developers and home-buyers currently have to pay. That would ensure fairness for all of parties,” said Thai Condominium Association president Prasert Taedullayasatit, who is also managing director for condominiums at Pruksa Real Estate.

Current fees

At present, when people buy a home, they have to pay a transfer fee of 2 per cent of the asset’s appraised value and a 1-per-cent mortgage fee, while property firms have to pay a 3.3-per-cent special business tax.

Meanwhile, when people sell a home they have owned for less than five years, they also have to pay the special business tax of 3.3 per cent, and must add the revenue from the sale to their personal income for tax purposes. If they have owned the home for more than five years they can avoid the special business tax, but still must declare the sale revenue as personal income.

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Source: The Nation | 4 August 2014

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