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Thailand Property Developers Welcome Proposed Tax Law

By on Sep 24, 2014 in Property News, Residential

Residential property companies have welcomed the proposed land and construction tax bill, which if passed will open up business opportunities to develop unused land currently owned by private landlords. Meanwhile, they suggest that the government should take the opportunity to reform all tax packages related to land and construction, such as transfer fees and mortgage fees.

“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 parties,” said Thai Condominium Association president Prasert Taedullayasatit, who is also managing director for condominiums at Pruksa Real Estate. Prasert argues that if a land and construction tax were to be added to these existing costs, it would be unfair to home-owners. His association is, therefore, urging that the transfer and mortgage fees be reduced if the new tax becomes a reality.

Finance Minister Sommai Phasi said tax reform was one of his first priority tasks, and that inheritance tax and land and construction taxation were the two most “tangible” ideas on the table.

Ananda Development president and CEO Chanond Ruangkritya said that if the National Legislative Assembly approved the bill for land and construction tax, it would not impact on property developers, as they buy land and develop it for sale, and do not hold undeveloped land for long periods. “We think it will be better for property business, because firms will have more land for residential development for people than in the current situation [of too much land lying idle],” he said.

Phasuk’s research supports the case for a land and construction tax law in order to distribute the nation’s land more equitably, which in turn would generate more value than is currently the case with much of it lying idle in the hands of a relatively small number of people.

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