Properties rented out for residential purposes subject to lower tax rate, ministries confirm

[Jonathan Fairfield]

Properties rented out for residential purposes subject to lower tax rate, ministries confirm

 

Homes or condominium units put up for rent as residential property will not be subject to the higher tax rate applied on rental properties for commercial use but will be charged at the lower tax rate applied to residential properties.

 

The Finance and Interior ministries have agreed to relax tax rules on home and condominiums units rented out by their owners as residential property.

 

Prasong Poontaneat, permanent secretary of Finance Ministry, yesterday clarified the land and building tax which will be enforced next year.

 

He said homes or condominium units put up for rent as residential property will not be subject to the higher tax rate applied on rental properties for commercial use but will be charged at the lower tax rate applied to residential properties.

 

That means the annual tax charge would be just Bt200 per million baht value of the property, not the Bt3,000 rate for commercial use properties. His announcement will be welcomed by Thais who were both confused and worried about the new tax charges to be enforced next year.

 

Lavaron Sangsnit, director general of the Fiscal Office, added that homes and condominiums rented out via Airbnb.com or registered as homestays will however be subject to commercial rates.

 

The two ministries will shortly announce the full details of land and building tax collection on these d properties, he added.

 

Source: https://www.nationthailand.com/business/30379856

 

-- © Copyright The Nation Thailand 2019-12-26

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[topt]

1 hour ago, Jonathan Fairfield said:

added that homes and condominiums rented out via Airbnb.com

Why is that any different to renting it out on any other platform or via an agent.......

[smutcakes]

This tax is going to be nibbled away at until its basically no more, or there is so many loopholes in it that no one has to pay. That or there will be so many grey areas open for interpretation, there will be many wealthy tax officials....

[phka]

Pity the uk didn't do the same 

[Srikcir]

On 12/26/2019 at 12:29 PM, Jonathan Fairfield said:

Homes or condominium units put up for rent as residential property will not be subject to the higher tax rate applied on rental properties for commercial use but will be charged at the lower tax rate applied to residential properties.

 

On 12/26/2019 at 12:29 PM, Jonathan Fairfield said:

The Finance and Interior ministries have agreed to relax tax rules

First, if renting a private property is for an economic benefit, it becomes commercial property. This is the law.

• As such the property owner while subjected to a higher tax rate can qualify for tax breaks applicable to commercial property such as depreciation and deductible repairs that are not applicable to private residential property. In fact it's not unusual that in the early years of commercial use (ie., leasing) that the owner can actually get a tax refund from such legal tax strategies.
• Second, while the Finance and Interior Ministries want to relax tax rules (why?) they cannot change the law by merely "relaxing the rules." The PM should be (assuming he agrees with the two Ministries recommendations) requesting an amendment to the Land and Building Property Tax law from the NLA. The Executive Branch of government cannot legislate.

The Executive Branch cannot unilaterally impose "rules" that negate or alter legislation.

Although Prayut will no doubt have majority coalition support in the NLA for such amendment, the opposition coalition may force the government to explain why such a change is necessary. This new law took several years during the Prayut NCPO regime to pass and the current regime is practically the alter-ego of the Prayut NCPO regime. But now suddenly rules of the law must be changed outside of the legislative process? There may be a significant transparency issue here.

[GertG]

The new Property tax is based on the type of usages. E.g. residential. This should not be mixed up with income tax.

[Destiny1990]

Sounds as if airbnb is legal here nowadays as long as paying the higher tax.

[baansgr]

On 12/26/2019 at 8:07 PM, phka said:

Pity the uk didn't do the same 

Why, a lot of lazy numpties have made easy profits from cheap money on the backs of pensioners savings.... disgusting bottom feeders