Property Taxes
It will take at least two years to implement a new property tax once the government introduces legislation for it, says a Treasury Department official.
Deputy director-general Prasit Suebchana yesterday said his department would take about two years to complete valuation of land and buildings covered by the new law.
The department now ap-praises 61 types of buildings. New types of structures, such as mobile-signal poles, may be included in the new tax coverage, he said.
His comment came after Prime Minister Abhisit Vejja-jiva and Finance Minister Korn Chatikavanij vowed to push for a long-delayed new property tax to replace the existing one on land and buildings.
Abhisit wants to make the tax more equitable, while Korn needs more revenue to support government welfare or populist projects. The new property tax is expected to bring in substantial revenue for local governments, because the Finance Ministry wants to expand the tax base.
It will take at least a few generations to see the income gap narrow from this policy
The existing tax of 12.5 per cent applies only to buildings used for commercial purposes and thus brings in very little revenue.
Economist Ammar Siam-walla expressed support for the new tax, saying it would help narrow Thailand’s widening income gap. All must have their properties taxed, probably with the exemption of the first 3 rai of land owned in urban areas and the first 10 rai in rural areas.
“It will take at least a few generations to see the income gap narrow from this policy, as in the United Kingdom’s experience,” he said.
Fiscal Policy Office director-general Somchai Sujjapongse said the new property tax would not take effect immediately after Parliament passed it, but rather be enforced after two years. The rate on land used by farmers would be very low, he said.
The Treasury Department this year plans to appraise land prices in 12 areas of Bangkok for a combined 447,600 plots of land. New land prices will be announced next year based on property transactions and be used for tax-collection purposes. The areas to be covered are Bangkok Noi, Bang Phlat, Taling Chan, Thawee Wattha-na, Thon Buri, Klong San, Bangkok Yai, Rat Burana, Thung Khru, Lat Krabang, Bang Kapi and Wang Thong Lang.
[relatedposts]Prasit of the Treasury Department expects land valuations in Thon Buri and Klong San to jump at least 40 per cent from the Skytrain extension.
The department will also survey and appraise land in 16 provinces upcountry: Phuket, Phetchaburi, Phang Nga, Nakhon Nayok, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon, Nakhon Pathom, Saraburi, Angthong, Nakhon Ratchasima, Chon Buri, Chachoengsao, Chiang Rai and Lampang.
Moreover, where plots of land are too small for appraisal in 48 provinces, the department will evaluate 3.3 million blocks of land.
The new land valuations will be announced next January. Prasit said his department would try to set land prices as close as possible to the market price. People often report lower-than-actual transaction prices to the tax authorities, in order to avoid paying a high tax.