Which is worse? Paying tax on vacant land holdings or developing more buildings in the midst of huge oversupply?

[trogers]

More unwanted projects?

 

Will we be seeing lots more condo projects being launched in a bid by landowners to escape the coming Land Tax?

[juehoe]

You can avoid the tax by «simulating» farming. I already have seen such areas where the owners planted some banana trees or similar.

[trogers]

Just now, juehoe said:

You can avoid the tax by «simulating» farming. I already have seen such areas where the owners planted some banana trees or similar.

Doubt they can claim agriculture use on land in the city that is zoned for other purposes.

[Khun Jean]

Will they start asking market prices?

 

No, banana trees it will be. Seen a lot of those recently. Even in 'ban nork', where Bangkok people own large amounts of land and are doing nothing with it.

 

 

[huawei]

It's a good thing...not all area have oversupply..any activity is better than derelict land..

[Khun Jean]

Spoke recently to a 'farmer' who rented 10 rai land for 7000 baht per year to plant pineapple.

Land is also for sale ( no sign but neighbors know) for 15Mb per rai. Last year it was 12Mb per rai.

Owners are 'Bangkok people'. :)

At that rate it will never sell. At least the farmer has some use out of it for a good price.

Land is still a good hedge against inflation, currency swings and economic downturn.

 

[saakura]

No developer will pump in hundreds of millions to build condos if nobody is buying due to oversupply. Neither will banks loan money to the developer. But i also feel the same, condos everywhere and more coming up all around where i live, seems crazy.

[bkkcanuck8]

On 2017-12-07 at 4:28 PM, trogers said:

More unwanted projects?

 

Will we be seeing lots more condo projects being launched in a bid by landowners to escape the coming Land Tax?

Maybe a slight uptick at most.  The issue is that most new projects require financing, and there is a limited amount of financing available for new projects -- especially in a potentially unstable market (i.e. rules change).  

 

My hope is that the rule changes (if of course they are enforced) will eventually lead to a correction in the market.  It won't happen overnight since the appreciation of the land is about 5% per year and the tax is less.  That 5% appreciation is now a real appreciation of 5% - tax, which may start encouraging some of the lesser prime land to be sold off since the investment criteria has changed.  It will also lower the demand to buy land for far off future plans - which means that appreciation should start dropping.  The next year that real appreciation will be less, then the following year eventually less.  Since there is a lot of land currently locked up right now eventually the effect will likely be some sort of "flood" of land that cannot be developed in the short term on the market which will eventually 5+ years down the road lead to a correction (if not earlier if there is another financial crisis in the world).

[bkkcanuck8]

On 2017-12-07 at 6:42 PM, trogers said:

Doubt they can claim agriculture use on land in the city that is zoned for other purposes.

Oh but you can have lots and lots of parking spaces open up....  

[trogers]

4 minutes ago, bkkcanuck8 said:

Oh but you can have lots and lots of parking spaces open up....  

Or moo kratak shops and weekend markets...??

[smotherb]

My Landlord has three large vacant lots in downtown Hatyai; he uses one as a parking lot for his restaurant and the other two are Thai open-air night spots--one shows futbal on the whitewashed wall of the building next door. He does not seem to be worried about the tax and, as usual, is asking exorbitant prices for the lots.

[gjoo888]

On 12/7/2017 at 6:39 PM, juehoe said:

You can avoid the tax by «simulating» farming. I already have seen such areas where the owners planted some banana trees or similar.

I live in central Bangkok, and next to a large lot of banana trees. So that's why it's there...

[Srikcir]

On 12/7/2017 at 4:28 PM, trogers said:

landowners to escape the coming Land Tax?

It may depend on the structure of ownership for the purposes of taxation.

Just because a tax is imposed doesn't mean it must be paid.

There are individual and company tax strategies that can be used legally to indirectly defer, mitigate or completely offset something like a land tax.

[trogers]

1 hour ago, smotherb said:

My Landlord has three large vacant lots in downtown Hatyai; he uses one as a parking lot for his restaurant and the other two are Thai open-air night spots--one shows futbal on the whitewashed wall of the building next door. He does not seem to be worried about the tax and, as usual, is asking exorbitant prices for the lots.

He has been careful next year.

 

He maybe asking exorbitant prices from undercover tax agents looking to establish land values... ??

[ToddinChonburi]

Really !! You think they are going to pay tax  .       Lol

[salavan]

On 12/7/2017 at 6:39 PM, juehoe said:

You can avoid the tax by «simulating» farming. I already have seen such areas where the owners planted some banana trees or similar.

what coming land tax?

can you send me or post more information on up and coming land tax

[trogers]

9 hours ago, salavan said:

what coming land tax?

can you send me or post more information on up and coming land tax

Land & Building Tax 2017

 

Assessment year starts on 1st April 2018, with tax payable in April 2019.

 

Note the 2% tax rate for property not used or left vacant.

 

So, those vacant condos and houses will see red...

Edited December 13, 2017 by trogers

[chrisandsu]

On 12/7/2017 at 6:39 PM, juehoe said:

You can avoid the tax by «simulating» farming. I already have seen such areas where the owners planted some banana trees or similar.

Yep I’m around Pak Chong at the moment . Land prices are wayyyyyy over priced . The Bangkok people who bought it are just letting the locals farm the land or planting teak trees that dont require much maintenance .

I bought 10 acres of land last year in America , they have a ‘timber’ tax there , I could of changed the status from residential to timber tax but then I can’t build for 5 -10 years and would have to resubmit all the permits that’s already been submitted . Not worth the hassle to save $500 a year .