Property, Inheritance Taxes Considered

[george]

Property, inheritance taxes considered

BANGKOK: -- Long-proposed land and inheritance taxes could finally become law under the Samak Sundaravej government.

Finance Minister Surapong Suebwonglee said he would submit an oft-delayed land and building law to the cabinet for approval next month.

The draft law would give the government authority to collect annual taxes on land and properties to help finance local public services.

Currently the government only collects taxes based on lease revenues earned on property and buildings, with the tax now set at 12.5%.

But Dr Surapong said the new law, first proposed over a decade ago, should be implemented to help upgrade the country's tax system to match international practices.

Revenues gained from the property tax would be used to finance operations by local administrations, but Dr Surapong added that the principle of the tax, rather than the actual money itself, was the greater priority.

"Vehicle owners currently pay a tax each year. Why should property owners be any different?" he asked.

The Finance Ministry also wants to revive proposals to impose an inheritance tax, which like the land tax idea, has long been shelved from passage due to fierce political opposition.

The land and building law will replace existing laws and impose a maximum annual tax of 0.5% based on current property valuations. A committee made up of the finance permanent secretary and other senior technocrats will be responsible for setting actual tax rates.

The draft law calls for a two-year grace period before actual taxes are collected from the public.

Tax rates will vary based on the type and use of a given property plot, with residential properties charged no more than 0.1% of valuation prices, farm land capped at 0.05% and undeveloped land set at 0.5%.

As an incentive for landowners to develop their holdings, undeveloped land will see annual tax rates doubled every three years up to a maximum of 2% of valuation prices.

-- Bangkok Post 2008-08-15

[Heng]

A good idea that'll never fly.

[cmsally]

Hmm, bringing the law up to international standards. Some countries have Inheritance Tax and some don't , so whose standards are they going by.

Totally ridiculous idea. Look at the average wage and the fact that many families are living on expensive land that has been in the family for ages. Some don't even have the money to do maintenance.

Sounds like a quick way to make over half the country homeless in a short period of time.

[Heng]

One's mileage may vary, but most poor folks who owned valuable land sold up or put it in hock a long time ago.