Inheritance, land taxes expected to start collecting next March

[Lite Beer]

Inheritance, land taxes expected to start collecting next March
By Digital Content

BANGKOK, Oct 11 -- The interim government is expected to start collecting inheritance and land taxes beginning next March, said Chartchai Na Chiangmai, a member of the National Reform Council.

Mr Chartchai, a former vice rector of the National Institute of Development Administration (NIDA), said collection of the taxes, proposed by Prime Minister Gen Prayut Chan-o-cha and aimed at reducing social disparity in Thailand, could probably start in March next year, as the issue is an urgent matter to foster justice in society.

Mr Chartchai, however, asked that the rich understand that collection of these taxes is essential,n as they have benefited from the country’s natural resources and now it is time to ask them to “pay excess money back to the country.”

Money collected from these taxes will be spent by the government to help improve the lives of poorer people, he said.

Initial discussions with concerned government agencies showed that inheritance tax will be imposed on those receiving above Bt50 million which should be acceptable by a majority of the people, said Mr Chartchai.

Those who inherit property less than this amount will not be affected.

The major reason from collecting land tax is for the owners to make use of the land instead of doing nothing, he said.

On allowing collection of the value-added tax to remain at the current rate of 7 per cent for another year, Mr Chartchai said the rate must be increased to 10 per cent in the future, in line with several other countries. (MCOT online news)

-- TNA 2014-10-11

[naboo]

What is the land tax? Is it the tax paid at the land office when land is transferred or is it a new tax paid annually on land?

[daveAustin]

... in addition to.

I like this though:

Money collected from these taxes will be spent by the government to help improve the lives of poorer people,

Yeah, right!

[Pib]

And the new, un-elected govt said: I must raise taxes and also implement new taxes....I need money...Oh yea, while increasing your taxes I'm still going to going to hold down all your costs...everybody will be happy or else!

[chainarong]

Both taxes are repressive , one tax penalises landowners, the other penalises any one who might be successful or is wealthy, could be termed wealth or death tax, these taxes have been phased out years ago , where I come from as anarchic, they form no important part of the tax collection and regarded as money grabbing also prevents people from wanting to progress further up the ladder, Thailand should be mindful that this is not the way to the peoples hearts, regardless of the spin, extra taxes on people should be the last thing Thailand needs and further more which landowners are being tax or is it the selected few , either way it will be interesting.

[chainarong]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

What is the land tax? Is it the tax paid at the land office when land is transferred or is it a new tax paid annually on land?

Land tax is tax paid annually, you would pay a stamp duty when transferring land.

[worgeordie]

Land tax and Inheritance taxes,would be OK with me,how else is

the Government going to prise money from the rich,most of who

try every trick in the book,both legal and illegal to pay as little tax

as possible,these taxes,which would never have been passed by

any previous Governments,(all the members been very rich and

some huge land owners),plus the valiant effort by the PM to do

his best to stamp out corruption,will mean an improvement to the

lives of the poorest in society,IF the money collected is spend

properly,NO more populist policies,that fail.

regards Worgeordie

[JOC]

Both taxes are repressive , one tax penalises landowners, the other penalises any one who might be successful or is wealthy, could be termed wealth or death tax, these taxes have been phased out years ago , where I come from as anarchic, they form no important part of the tax collection and regarded as money grabbing also prevents people from wanting to progress further up the ladder, Thailand should be mindful that this is not the way to the peoples hearts, regardless of the spin, extra taxes on people should be the last thing Thailand needs and further more which landowners are being tax or is it the selected few , either way it will be interesting.

I agree with the sentiment of your post, but if implemented fairly, those taxes hopefully will create some kind of social justice in the long run.

A lot of land is owned by big tycoons with 100.000's of rai "investmentland", only fair those guys pay tax on unused land!

As for the inheritance tax, again we are talking about some people in this country being stinking rich, normally not contributing anything to the state coffers. So a "death-tax" might not be such a bad idea!

Actually the first time the general has suggested anything going against the rich and powerful amart, so maybe there is hope after all?

[airconsult]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

What is the land tax? Is it the tax paid at the land office when land is transferred or is it a new tax paid annually on land?

Land tax is tax paid annually, you would pay a stamp duty when transferring land.

As I understand it - you pay land tax on developed, utilised land annually - if you demolish all structures and the land is not in use - you apply that it is tax-exempt.

Perhaps more accurately - they are removing the tax-exempt status of unused land - that will encourage people to put it into use again. ie. the vacant/demolished lots in the cbd in bkk. Currently landowners frequently demolish - leave the rubble - don't pay tax, and wait until the land value is higher before redeveloping or selling.

[Chao Lao Beach]

What is the land tax? Is it the tax paid at the land office when land is transferred or is it a new tax paid annually on land?

An annual tax on all land in Thailand.

[Dogmatix]

So it seems that IHT will be a tax on heirs, not estates, e.g. an estate worth B200m distributed to 4 heirs will not be taxable because each heir only receives B50m.

[mahjongguy]

"As I understand it..."

No, there is currently no annual property tax at all.

The proposed tax will be pretty steep for undeveloped land but very minimal for typical residential properties. The proposed residential rate is 0.1%, ten times less than in most U.S. states.

Once the law goes into effect, the battle between rich and poor will shift to the appraisal values on which the tax is imposed. It will take years for fair and reasonable appraisals to be established, and then they must be constantly reviewed. It's an expensive process and will be a fertile plain for corruption.

[cloudhopper]

Inheritance tax intends to mitigate the multigenerational concentration of wealth and the disproportionate influence it buys. Similar concept to breaking up monopolies. Needed desperately here IMO.

The land tax not so much.

[thaipod]

It's already common for families to distribute titles to family members to reduce the tax burden.

Maybe they will do the same as the shin famiy where the drivers and maids get a share of land.

[Thai at Heart]

Both taxes are repressive , one tax penalises landowners, the other penalises any one who might be successful or is wealthy, could be termed wealth or death tax, these taxes have been phased out years ago , where I come from as anarchic, they form no important part of the tax collection and regarded as money grabbing also prevents people from wanting to progress further up the ladder, Thailand should be mindful that this is not the way to the peoples hearts, regardless of the spin, extra taxes on people should be the last thing Thailand needs and further more which landowners are being tax or is it the selected few , either way it will be interesting.

0.1% of the Thai population control 40% of the wealth. Land distribution and wealth distribution in Thailand is disgustingly poor.

In fact one could argue that it is a complete lack of distribution of wealth that is preventing people from getting up the ladder . the wealth is so concentrated into so few that it is impossible to enter the wealth creating business.

Thailand need to find a way to make its next step forward. This needs educatiin and infrastructure. As long as so few pay any tax and as long as the wealth is just funneled into untaxed land, nothing will change.

[Pib]

"As I understand it..."

No, there is currently no annual property tax at all.

The proposed tax will be pretty steep for undeveloped land but very minimal for typical residential properties. The proposed residential rate is 0.1%, ten times less than in most U.S. states.

Once the law goes into effect, the battle between rich and poor will shift to the appraisal values on which the tax is imposed. It will take years for fair and reasonable appraisals to be established, and then they must be constantly reviewed. It's an expensive process and will be a fertile plain for corruption.

mahjongguy,

You got a reference/weblink/etc. for the 0.1% residential rate. All I've seen in articles so far is the rates proposing several percent up to around 5%. I fully expect the property tax would apply residential condos and homes. Thanks.

Let's say you have a condo or house in Bangkok worth say Bt7M...the house applies in my case (in wife's name) but for many condo projects in Bangkok Bt7M would be on the lower end....and I expect quite a few farangs own condos in Bangkok and other locations in Thailand like Pattaya and Phuket easily worth Bt7M and much more. Anyway, 0.1% on a residence valued at Bt7M would be a Bt7,000 property tax bill yearly.

That should help the economy along while also raising the VAT from 7 to 10% and implementing an inheritance tax...throw in a few more excise tax increases like on tea drinks and the Thai economy should pickup speed again. This unelected govt seems to have gone tax crazy.

Pib

[Thai at Heart]

"As I understand it..."

No, there is currently no annual property tax at all.

The proposed tax will be pretty steep for undeveloped land but very minimal for typical residential properties. The proposed residential rate is 0.1%, ten times less than in most U.S. states.

Once the law goes into effect, the battle between rich and poor will shift to the appraisal values on which the tax is imposed. It will take years for fair and reasonable appraisals to be established, and then they must be constantly reviewed. It's an expensive process and will be a fertile plain for corruption.

mahjongguy,

You got a reference/weblink/etc. for the 0.1% residential rate. All I've seen in articles so far is the rates proposing several percent up to around 5%. I fully expect the property tax would apply residential condos and homes. Thanks.

Let's say you have a condo or house in Bangkok worth say Bt7M...the house applies in my case (in wife's name) but for many condo projects in Bangkok Bt7M would be on the lower end....and I expect quite a few farangs own condos in Bangkok and other locations in Thailand like Pattaya and Phuket easily worth Bt7M and much more. Anyway, 0.1% on a residence valued at Bt7M would be a Bt7,000 property tax bill yearly.

That should help the economy along while also raising the VAT from 7 to 10% and implementing an inheritance tax...throw in a few more excise tax increases like on tea drinks and the Thai economy should pickup speed again. This unelected govt seems to have gone tax crazy.

Pib

I think it is a very reasonable amount.

[englishoak]

"As I understand it..."

No, there is currently no annual property tax at all.

The proposed tax will be pretty steep for undeveloped land but very minimal for typical residential properties. The proposed residential rate is 0.1%, ten times less than in most U.S. states.

Once the law goes into effect, the battle between rich and poor will shift to the appraisal values on which the tax is imposed. It will take years for fair and reasonable appraisals to be established, and then they must be constantly reviewed. It's an expensive process and will be a fertile plain for corruption.

mahjongguy,

You got a reference/weblink/etc. for the 0.1% residential rate. All I've seen in articles so far is the rates proposing several percent up to around 5%. I fully expect the property tax would apply residential condos and homes. Thanks.

Let's say you have a condo or house in Bangkok worth say Bt7M...the house applies in my case (in wife's name) but for many condo projects in Bangkok Bt7M would be on the lower end....and I expect quite a few farangs own condos in Bangkok and other locations in Thailand like Pattaya and Phuket easily worth Bt7M and much more. Anyway, 0.1% on a residence valued at Bt7M would be a Bt7,000 property tax bill yearly.

That should help the economy along while also raising the VAT from 7 to 10% and implementing an inheritance tax...throw in a few more excise tax increases like on tea drinks and the Thai economy should pickup speed again. This unelected govt seems to have gone tax crazy.

Pib

I think it is a very reasonable amount.

The amount is reasonable, its just that everyone has got so used to having everything tax free they expect that forever.

Main reason so many Thais here have so much disposable income ( and they do ) is they dont pay tax, period. Imagine how happy we would be with that arrangement.

[Mudcrab]

"As I understand it..."

No, there is currently no annual property tax at all.

The proposed tax will be pretty steep for undeveloped land but very minimal for typical residential properties. The proposed residential rate is 0.1%, ten times less than in most U.S. states.

Once the law goes into effect, the battle between rich and poor will shift to the appraisal values on which the tax is imposed. It will take years for fair and reasonable appraisals to be established, and then they must be constantly reviewed. It's an expensive process and will be a fertile plain for corruption.

mahjongguy,

You got a reference/weblink/etc. for the 0.1% residential rate. All I've seen in articles so far is the rates proposing several percent up to around 5%. I fully expect the property tax would apply residential condos and homes. Thanks.

Let's say you have a condo or house in Bangkok worth say Bt7M...the house applies in my case (in wife's name) but for many condo projects in Bangkok Bt7M would be on the lower end....and I expect quite a few farangs own condos in Bangkok and other locations in Thailand like Pattaya and Phuket easily worth Bt7M and much more. Anyway, 0.1% on a residence valued at Bt7M would be a Bt7,000 property tax bill yearly.

That should help the economy along while also raising the VAT from 7 to 10% and implementing an inheritance tax...throw in a few more excise tax increases like on tea drinks and the Thai economy should pickup speed again. This unelected govt seems to have gone tax crazy.

Pib

Just like the good old Labour Party did back 'ome eh lad.

[Time Traveller]

"The major reason from collecting land tax is for the owners to make use of the land instead of doing nothing, he said." ---

Why must people do something with the land? What's wrong with vacant land and trees? The last thing Thailand needs are more derelict shophouses or factories because people were forced to do something with the land.

The Land Tax is a punch in the face to the ordinay person and Bangkok is the worst example of this. Unfortunately, Thailand has laws preventing an honest discussion of Landlords and Tax.

However, it's sad when the largest landowner in Bangkok decides to turn city land into another condo/office hi rise building instead of parks for people to enjoy.

[Pib]

The amount is reasonable, its just that everyone has got so used to having everything tax free they expect that forever.

Main reason so many Thais here have so much disposable income ( and they do ) is they dont pay tax, period. Imagine how happy we would be with that arrangement.

All Thais pay taxes everyday via the current 7% VAT...and many items have "excise" taxes applied like the purchase of a domestically made vehicle which has an excise tax in the 10 to 30% ballpark primarily depending on engine size (that's the main reason vehicles cost so much in Thailand)....and for import vehicles a very healthy "import" tax is applied combined with the 7% VAT

The current Thai tax system seems to be regressive in that since so many people do not file "personal income" tax returns the govt must get its tax via VAT, excise, import type taxes...basically collect tax via means which does not rely on personal income tax as the main source of tax revenue....instead, rely on a consumption based tax system which is a regressive tax system and hits the poorest the hardest.

[mahjongguy]

"The current Thai tax system seems to be regressive in that since so many people do not file "personal income" tax returns the govt must get its tax via VAT, excise, import type taxes...basically collect tax via means which does not rely on personal income tax as the main source of tax revenue....instead, rely on a consumption based tax system which is a regressive tax system and hits the poorest the hardest."

Perfectly said and totally correct.

The property tax law is still being debated but the current proposal is 0.05% for agricultural land, 0.1% for residential, and 0.2% for commercial land. There is a five year phase-in. Residential land will be exempt for the first two years, charged 50% of the tax in the third year and 75% of the tax in the fourth year.

[There have been articles in the Bangkok Post but such links are not allowed in this forum.]

[fullcave]

"The major reason from collecting land tax is for the owners to make use of the land instead of doing nothing, he said."

Yes, and for sure nothing to do with the proceeds going to the Junta....

[Pib]

"The current Thai tax system seems to be regressive in that since so many people do not file "personal income" tax returns the govt must get its tax via VAT, excise, import type taxes...basically collect tax via means which does not rely on personal income tax as the main source of tax revenue....instead, rely on a consumption based tax system which is a regressive tax system and hits the poorest the hardest."

Perfectly said and totally correct.

The property tax law is still being debated but the current proposal is 0.05% for agricultural land, 0.1% for residential, and 0.2% for commercial land. There is a five year phase-in. Residential land will be exempt for the first two years, charged 50% of the tax in the third year and 75% of the tax in the fourth year.

[There have been articles in the Bangkok Post but such links are not allowed in this forum.]

Thanks...under a previous govt several years back I remember reading approx 0.05 to 0.1% proposal for a typical residence, but that proposal died due to voter revolt. But with the current govt a voter revolt won't occur (not allowed). I've just missed any recent articles on the current proposal...seems the articles I have seen were talking at least several percent...remember seeing one article a few weeks ago that was talking 5% but it had no specifics.. Now 5% on Bt7M would be Bt350K/year--probably not correct for sure. I'll do some searching on the Bangkok Post website to see if I can find anything specific and very recent. Thanks.

[KittenKong]

I would be in favour of taxes of the order of up to 5% per year on unused land and property. Also capital gains tax at the time of sale of perhaps 50% on property that is not your main residence.

[Pib]

OK, in the 26 Aug 14 Bangkok Post there is an article titled: "Property Tax: more questions than answers under proposed law changes."

The rates under discussion are talked about in detail there. A person can go to the Bangkok Post and search and should find the story easily.

[Pib]

I would be in favour of taxes of the order of up to 5% per year on unused land and property. Also capital gains tax at the time of sale of perhaps 50% on property that is not your main residence.

You own any unused property in Thailand? I doubt it assuming you are a farang. Easy to say if you wouldn't be affected.

[JOC]

I would be in favour of taxes of the order of up to 5% per year on unused land and property. Also capital gains tax at the time of sale of perhaps 50% on property that is not your main residence.

Posted from your 5000baht/month rented room in Patts??

[Carrerakiss]

"As I understand it..."

No, there is currently no annual property tax at all.

The proposed tax will be pretty steep for undeveloped land but very minimal for typical residential properties. The proposed residential rate is 0.1%, ten times less than in most U.S. states.

Once the law goes into effect, the battle between rich and poor will shift to the appraisal values on which the tax is imposed. It will take years for fair and reasonable appraisals to be established, and then they must be constantly reviewed. It's an expensive process and will be a fertile plain for corruption.

mahjongguy,

You got a reference/weblink/etc. for the 0.1% residential rate. All I've seen in articles so far is the rates proposing several percent up to around 5%. I fully expect the property tax would apply residential condos and homes. Thanks.

Let's say you have a condo or house in Bangkok worth say Bt7M...the house applies in my case (in wife's name) but for many condo projects in Bangkok Bt7M would be on the lower end....and I expect quite a few farangs own condos in Bangkok and other locations in Thailand like Pattaya and Phuket easily worth Bt7M and much more. Anyway, 0.1% on a residence valued at Bt7M would be a Bt7,000 property tax bill yearly.

That should help the economy along while also raising the VAT from 7 to 10% and implementing an inheritance tax...throw in a few more excise tax increases like on tea drinks and the Thai economy should pickup speed again. This unelected govt seems to have gone tax crazy.

Pib

I think it is a very reasonable amount.

The amount is reasonable, its just that everyone has got so used to having everything tax free they expect that forever.

Main reason so many Thais here have so much disposable income ( and they do ) is they dont pay tax, period. Imagine how happy we would be with that arrangement.

The tax is reasonable. The largesse with which it is spent and the amount of corruption involved, is not.

At the higher end of the scale, aircraft carriers and submarine pens without submarines, at the lower end of the scale, three sets of traffic lights installed in my small village which have been flashing red lights only, since two weeks after they were installed more than a year ago.

The theory is good, the implementation is likely to simply mean more wasted money and more skim off the top. In other words, a bigger cess pool.

[wwest5829]

Land tax and Inheritance taxes,would be OK with me,how else is

the Government going to prise money from the rich,most of who

try every trick in the book,both legal and illegal to pay as little tax

as possible,these taxes,which would never have been passed by

any previous Governments,(all the members been very rich and

some huge land owners),plus the valiant effort by the PM to do

his best to stamp out corruption,will mean an improvement to the

lives of the poorest in society,IF the money collected is spend

properly,NO more populist policies,that fail.

regards Worgeordie

OK, Wogeordie, but what do you refer to as populist policies. Payment to rice farmers? Subsidized public health coverage?