Government Assessment Price

[MattFS218]

I'm wondering how accurate government assessment prices are at determining the price of land/property/condos. How is the gov. assessment price determined? Is it depreciated over time? What factors does it take into account. Should I expect to pay the assessment price or significantly more/less?

What price is the property tax transfer based on?

--matt

[Irene]

Not that accurate and not up to date. The price is subject to survey and revisited after a few years. No depreciation or adjustment is made until the next survey. Normally, the assessed value is not used for actual sales. The property tax is based on the actual declared selling price or the official price, whichever is higher.

[quiksilva]

The land department valuations can be either significantly less or much higher than true open market value, or it could be close. Sorry to be vague but its dependent on a lot of factors.

Much like most governments around the world their estimations are inaccurate, due to the methods they employ and the frequency of their valuations. Most only manage assessments of land values every five years or so, and even then when its up to date they tend to be shaky. For instance they recently said that the most expensive plots of land are in Silom at THB 400K per sq wah, when in fact land at the British Embassy sold for THB 900K psw and land on Silom currently transacts at THB 600-700K psw.

They use what is known as a depreciated replacement cost (DRC) approach. This comprises adding an estimation of current land value to a high level assumption for build costs. The latter of which will be based on a rate per square meter depending on the property type, and then applying depreciation for the building's age.

As Irene said, taxes at transfer are based on whichever is higher, the sale price or their assessment.

[johnnyk]

When I transferred land to my company I had to pay tax on their assessed value which was about 150K baht higher than what I actually paid.

A lightning-quick analysis convinced me the land office held more cards than I did so I decided it was easier to pay about 15K baht more tax than to fight it.