New land and building tax act in 2018

Keywords: Mazars, Thailand, Tax, NLA, Royal Gazette, Land and Building Tax

4 December 2018

The new Land and Building Tax places property into 4 categories based on use, and sets the tax rates based on the appraisal value of the property as follows:

1.   Agricultural use with a tax ceiling of 0.15%

There are 5 tax rates:

• 0.01% for land value of THB 1 million – THB 75 million;
• 0.03% for land valued at THB 76 million – THB 100 million;
• 0.05% for land valued at THB 101 million – THB 500 million;
• 0.07% for land valued at THB 501 million – THB 1 billion; and
• 0.1% for land valued at more than THB 1 billion.

There is a tax exemption for agricultural land worth up to THB 50 million belonging to individuals, and the new law will not be applicable to individual owners for the first three years.

2.   Residential use with a tax ceiling of 0.3%

There are 4 tax rates:

• 0.02% for land valued at THB 1 million – THB 50 million;
• 0.03% for land valued at THB 51 million – THB 75 million;
• 0.05% for land valued at THB 76 million – THB 100 million; and
• 0.1% for land valued at more than THB 100 million.

For first homes, there is a tax exemption of up to THB 50 million for owners of both the land and home, whose names are on the household registration documents, and up to THB 10 million for those who own homes only and whose names are on household registration documents.

3.   Commercial use with a tax ceiling of 1.2%

There are 5 tax rates:

• 0.3% for land valued at THB 1 million – THB 50 million;
• 0.4% for land valued at THB 51 million – THB 200 million;
• 0.5% for land valued at THB 201 million – THB 1 billion;
• 0.6% for land valued at THB 1 billion – THB 5 billion; and
• 0.7% for land valued at more than THB 5 billion.

4.   Vacant or unused property

There are 5 tax rates:

• 0.3% for land valued at THB 1 million – THB 50 million;
• 0.4% for land valued at THB 51 million – THB 200 million;
• 0.5% for land valued at THB 201 million – THB 1 billion;
• 0.6% for land valued at THB 1 billion – THB 5 billion; and
• 0.7% for land valued at more than THB 5 billion.

      The rates will increase by 0.3% every three years, but will not exceed 3%. 

Under the new Land and Building Tax Act, if any property is used for several purposes, tax shall be levied in proportion to the area used for each purpose according to the rules and procedures specified by the Minister of Finance and the Minister of interior.

The new Land and Building Tax Act will be submitted to the King for his signature, then published in the Royal Gazette in order to become effective. It is expected that this new Land and Building Tax Act will be published and become effective by the end of this year or early next year, so that actual tax collection will start on 1 January 2020. In the meantime, the 12.5% House and Land Tax and the current Land Development Tax will continue to apply.