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Author Topic: Thai property tax, transfer fee overlap  (Read 13926 times)

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Thai property tax, transfer fee overlap
« on: September 15, 2009, 08:25:57 PM »
Thai property tax, transfer fee overlap 
Bangkok Post: 15 Sep 2009
www.BangkokPost.com

Transfer fee is not needed

The government should consider scrapping transfer fees on property transactions once the new land and building tax comes into effect, said Lawaron Saengsanit, a tax expert at the Commerce Ministry.

Property transactions are subject to a transfer fee of 2% based on the official value of the property.

Mr Lawaron said transfer fees in practice represented an asset tax that would be duplicated once the proposed land and building tax comes into effect.

Property buyers and sellers are subject to five taxes under current law: stamp taxes, income taxes, specific business taxes, municipality taxes and transfer taxes.

The new land and building tax, expected to be approved by the cabinet this year, will collect a new tax on properties nationwide. Local administrations will be responsible for setting tax rates in their jurisdictions limited by maximum rates imposed by a national committee.

Maximum rates are expected to be set at up to 0.5% per year for commercial properties, 0.1% for residential properties and 0.05% for agricultural land.

Property developers and industry associations argue that if the new tax is approved, existing property-related taxes should be revised or eliminated.

Mr Lawaron noted that previous governments met with sharp public opposition to the concept of a new tax, even though revenues are to be reserved for community services and development.

Past governments as a result avoided imposing annual taxes to instead collect a tax once a transaction occurs, a structure that has proven to be more acceptable for most.

Klaew Tongsom, the director of the Treasury Department's Property Valuation Bureau, offered support for an overhaul of property-related taxes once the new land and building tax is in place.

Reducing the tax burden for property holders will help reduce incentives to underdeclare asset values and allow market transactions to be made at prices more closely aligned with official valuations.

Offline lahansai

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Re: Thai property tax, transfer fee overlap
« Reply #1 on: October 05, 2009, 06:38:20 PM »
great info keep on ADMIN  jumping4

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Re: Thai property tax, transfer fee overlap
« Reply #2 on: November 01, 2009, 07:37:41 PM »
Proposed new Thai Property Tax review 
Bangkok Post: 1 Nov 2009
www.bangkokpost.com/news/investigation/26685/the-proposed-new-property-tax

Expat Counsel
The proposed new Property Tax

Writer: James Finch and Nilobon Tangprasit


We're going to interrupt our series on family law issues because we've received a number of emails asking us to explain about the proposed real estate tax law, formally known as Land and Building Tax Act BE (the Draft Act) pending before Parliament. The Draft Act was prepared by the Ministry of Finance and has been approved by the Council of State.

On Aug 25 this year Korn Chatikavanij, the Minister of Finance, presented the Draft Act to the cabinet. It will probably be brought before Parliament and voted upon this year, though there is, as yet, no date set for a vote. If approved, the Draft Act will be effective in January 2010. The tax rates mentioned below would be phased in over a five-year period.

The tax rate in the Draft Act for residential property on which there is no commercial activity will be 0.1% of the appraised price. The appraised price, incidentally, always includes a value for improvements such as houses or buildings on land. The existing tax scheme is in practice largely ignored. The changes in the Draft Act will, therefore, place an additional cost upon owning residential property.

The Draft Act contains a new tax of 0.5% of the appraised value for undeveloped land held for future commercial purposes or otherwise, doubling every three years, and increasing to as high as 2.0% if the land is not used over a period of years. This will be phased in. Unlike the taxes now on the books, mentioned below, it is anticipated that the new tax, starting at 0.5%, will be enforced, and may encourage holders of large blocks of land to subdivide and sell off.

The real estate taxes that exist now are inconsistent and do not provide the Thai government with what it considers to be adequate revenue. There are two important bases of taxation at present.

First, there is the Act on House and Land Tax, BE 2475 (AD 1932). This law taxes rental income or assessed rental income on property at 12.5%. Property in which the owner resides is exempt from this, however, and revenues under it overlap with the income tax law. Also, compliance is mainly voluntary and doesn't happen much.

Second, there is the Municipality Tax Act, BE 2508 (AD 1965), which applies taxes based on the Appraisal Price Law, BE 2521-2524. The Appraisal Price Law, however, sets values too low to allow for what the government considers adequate revenues. The Municipality Tax Act therefore encourages what is referred to by some in the government of speculative holding of large blocks of land.

So the Draft Act was proposed in place of existing legislation and the above existing acts will be repealed by its effect.

The yearly ceiling or maximum rates multiplied by the appraised value that will be phased in over five years under the Draft Act will be as follows:

0.5% of land and buildings used for commercial purposes.

0.1% of land and buildings used for residential purposes.

0.05% of land used for agricultural purposes.

As mentioned above, for undeveloped land the Draft Act contains an additional ceiling rate of 0.5% of the appraised value, but this rate will double every three years as long as the property is not used until it reaches 2.0% of the appraised value.

As also discussed above, the yearly tax on residential property will, under the Draft Act, eventually be 0.1% of the assessed price. This may work a hardship on the poor. There is presently talk that there may be a royal decree exempting poor people and their properties from the tax.

The Treasury Department is presently reassessing all property in Thailand in anticipation of the passage of the Draft Act.

James Finch of Chavalit Finch & Partners finch@chavalitfinchlaw.com and Nilobon Tangprasit of Siam City Law Offices Limited nilobon@siamcitylaw.com

For more information see http://www.chavalitfinchlaw.com

Comments? Questions? Contact us at the email addresses above.

Offline SEABY

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Re: Thai property tax, transfer fee overlap
« Reply #3 on: June 12, 2011, 11:16:37 AM »
can someone tell me the cost of transfer of a house and land as %  ????

manupete

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Re: Thai property tax, transfer fee overlap
« Reply #4 on: June 12, 2011, 11:27:08 AM »
can someone tell me the cost of transfer of a house and land as %  ????

This may help  :)

http://www.thaivisa.com/forum/topic/48018-land-transfer-fees/

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Re: Thai property tax, transfer fee overlap
« Reply #5 on: June 12, 2011, 11:29:39 AM »
can someone tell me the cost of transfer of a house and land as %  ????

PROPERTY TRANSFER TAX CALCULATOR

http://www.siam-legal.com/realestate/property-tax-transfer-calculator.php

I think this calculator is updated but recheck it with the land office in your area to see if the numbers are correct.

sawadi


LAND MEASUREMENT CONVERTER
       
Land in Thailand is measured in rai, ngan and wah.
Land prices are expressed in baht per rai or baht per wah for smaller plots.

1 sq. wah = 4 sq. m.
1 acre = 2.471 rai or 43,560 sq. ft.
1 ngan = 100 wah or 400 sq. m.
1 hectare = 6.25 rai or 10,000 sq. m.
1 Rai = 4 Ngan or 1600 sq. m.

 

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