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Thailand Land Banks – Reprieve for Developers

By on Jan 19, 2015 in Investment-Land, Property News

The Finance Ministry is likely to set a one- or two-year grace period for imposing the land and buildings tax on land banks held by property developers. Deputy Finance Minister Wisut Srisuphan believes the grace period is essential for developers that need to hold large land banks to develop projects. The government wants to avoid the market for property being flattened by developers passing on the costs to homebuyers.

Without the grace period, land banks held by developers could be subject to a tax of a maximum 4% of the appraisal price of vacant land. The new bill, expected to go before the cabinet this month, sets maximum rates of 0.5% on land for agricultural use, 1% on land for residential use and 4% on land for commercial use.

Unused or vacant land would be charged at a progressive rate every three years but not exceeding a maximum level of 4% of appraised value.

The new assessment values will serve as the basis for the land and buildings tax, with the law likely to take effect some time in 2016.

The bill also offers land and building tax exemption to property valued at no more than 1 million baht, meaning that those who possess property valued at 1 million or lower are not liable for tax while those who own property worth more than 1 million baht are taxed only on the portion that exceeds 1 million.

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