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Transfer fees poised to rise by 30%

By on Aug 10, 2015 in Property News

Property transfer fees are expected to increase by 30% after the land appraisal prices based on individual land plots are fully implemented, says the head of the Treasury Department.

Transfer fees will rise by 30-50 billion baht when the entire 32 million land plots are individually appraised, said director-general Chakkrit Parapantakul.

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The appraisal prices of 8 million land plots that have been valued are 30% higher than their current prices based on the lot and block system. These higher appraisal prices will push up transfer fees in addition to the higher tax revenue generated when the land and buildings tax comes into force, he said.

Individual assessment helps appraisal prices be nearer to market prices, said Mr Chakkrit.

Last week Finance Minister Sommai Phasee made another tweak to the land and buildings tax bill, saying the value of buildings will be taxed, but collection will start three years after the law is enforced. The bill will go before the cabinet for approval in the next few weeks. Mr Sommai’s move came after the ministry earlier floated the idea of exempting the value of buildings from the new property tax to reduce public complaints.

The land and buildings tax was designed to replace the house and land tax and local development tax, which have been criticised as regressive since they are based on outdated appraisal prices and have many waivers. The new tax is designed to boost revenue for local administrative organisations while lowering the government’s budget burden in providing financial support.

The ministry estimates the tax will generate about 200 billion baht a year.

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Source: Bangkok Post – 10 August 2015

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