Jump in land transfers: owners 'spooked by Thai inheritance tax'

[webfact]

Jump in land transfers: owners 'spooked by inheritance tax'
Wiraj Sripong
Somluck Srimalee
The Nation



BANGKOK: -- THE PROSPECT of an inheritance tax has led to an unusually big jump in land transfers over recent months.

In December 2014 alone, there were 1,290 land transactions in Bangkok worth Bt14.74 billion in total. These were increases of 88 per cent and 180 per cent respectively, over the same period in 2013.

Last month saw 55 inheritance land transfers in inner Bangkok, up from 12 a year earlier, with a total fee income of Bt28.16 million (up from Bt1.94 million), said Manus Chuasawat, chief of the Bangkok Metropolis Land Office.

"Many Bangkokians came to the office to make transfers of land ownership," he said.

The value of land transferred as inheritance increased from Bt388 million in December 2013 to Bt5.6 billion last December.

A fee worth 0.5 per cent of the land-appraisal value is collected for land transferred to the heir.

The land offices in Bangkok recorded 1,290 transactions in December 2014, compared to 686 transactions in December 2013 - an 88 per cent rise.

The land value was Bt14.74 billion - a 180-per-cent increase.

A total of Bt73.77 million in transfer fees was collected.

The Bangkok Metropolis Land Office saw the highest value in inheritance land transfers - Bt2.8 billion, followed by the Land Department's Phra Khanong branch (Bt758.9 million), Huai Khwang branch (Bt706.3 million), Bangkok Noi branch (578.1 million), and Prawet branch (Bt532.31 million).

The office covers inner districts, namely Phra Nakhon, Dusit, Pom Prab (Sattru Phai), Pathumwan, Samphanthawong, Bang Sue, Yannawa Bang Kho Laem and Sathon.

The Inheritance Tax Bill, which is now under scrutiny in its second reading by the National Legislative Assembly, seeks to collect a tax that is 10 per cent of an inheritance exceeding Bt50 million.

"This [the transfer spike] is a clear result derived from the Inheritance Tax Bill," Manus said.

"As the bill is in the process of being discussed, concerning details about the threshold, people were worried about the amount of tax they would have to pay."

The possibility of transfer fees rising was another factor prompting people to make more transactions, he said.

"Should the law pass and the [increased] transfer fees come into effect, people will be charged twice," Manus explained.

The law is expected to come into effect in 2016.

The top three districts in terms of the number of transactions were Bang Khunthien, Chom Thong and Bang Bon.

Phra Nakhon, Dusit, Pom Prab (Sattru Phai), Pathumwan, Samphanthawong, Bang Sue, Yan Nawa and Sathon are ranked among the most expensive areas.

The total number of land-transfer transactions in Bangkok in December 2014, which combined sale, gift and inheritance transactions, totalled 17,573 - up 1.4 per cent from the 17,324 transaction in December 2013.

Of the 17,573 transactions, 12,667 were sales, 3,616 gifts, and 1,290 inheritance.

Across the country, inheritance-land transfers totalled Bt5.36 billion in December 2013.

Finance Minister Sommai Phasee previously said that the impact of the inheritance tax would not be too severe on most people because the 10 per cent tax will apply only to the Bt50 million ceiling.

"I think that there is not an urgent need for people to transfer their inheritance to their heir at this time," he said.

Along with the increase in land transfers, there has also been a rise in the sale of land to property firms.

"From December last year till now, most landlords in Bangkok and the provinces are offering to sell their land to us because they do not want to have the land as an inheritance when the inheritance tax comes into effect," Supalai Plc deputy managing director Tritecha Tangmatitham said. "They want to keep the cash to invest in other asset that will avoid the inheritance tax."

Source: http://www.nationmultimedia.com/national/Jump-in-land-transfers-owners-spooked-by-inheritan-30252657.html


-- The Nation 2015-01-26

[NongKhaiKid]

What's the problem, don't the superstitious Thais believe in spooks ?

Wooooo !

[BSJ]

Predictable. The folks didn't get rich by being stupid!

[slapout]

Then again the movement of land titles may also be individuals attempting to get ill gotten gains out of their names and thus reduce assets which may be siezed'The rice scam is reported to have put vast sums of money into the hands of indibviduals who were not entitled to it. Dobt much oft that cash went into the banking system, Of course there were other scams going on and many are being investigated, may be are lot of <deleted> puckered up awaiting results of investigations.

[ramrod711]

Now is the time to address the issue of a property tax as well. A tax on vacant land, that is being held for speculative purposes, may well induce owners to develop or rent the land to farmers or small business. Farmers may see a reduction of rents as the land became available which would mean that subsidies may not be necessary, or might, at least, be reduced.

[Morakot]

The Inheritance Tax Bill, which is now under scrutiny in its second reading by the National Legislative Assembly, seeks to collect a tax that is 10 per cent of an inheritance exceeding Bt50 million.

Compare this to the UK: For the 2010/2011 tax year, the IHT rate was 0% on the first £325,000 (the "nil-rate band"), and 40% on the rest of the value, at death, of an individual's taxable estate.

[Morakot]

Predictable. The folks didn't get rich by being stupid!

Sounds more like this opposite! The article says that currently people pay 0.5% flat and after 2016 they will pay 0% for the first 50 million.

[trogers]

Predictable. The folks didn't get rich by being stupid!

Sounds more like this opposite! The article says that currently people pay 0.5% flat and after 2016 they will pay 0% for the first 50 million.

The number of persons in the above table did not show the number of transfers. Could well be some wealthy individuals made multiple transfers of total value far exceeding the 50 million.

Edited January 26, 2015 by trogers

[Bluespunk]

Lot of worried people in Prawet and Bangkok Noi it would seem.

[Sviss Geez]

Predictable. The folks didn't get rich by being stupid!

Sounds more like this opposite! The article says that currently people pay 0.5% flat and after 2016 they will pay 0% for the first 50 million.

0.5% is the transfer fee that everyone has to pay at the land office to transfer property, zero is the proposed amount of inheritance tax at the quoted level, two completely different things.

[Time Traveller]

Now is the time to address the issue of a property tax as well. A tax on vacant land, that is being held for speculative purposes, may well induce owners to develop or rent the land to farmers or small business. Farmers may see a reduction of rents as the land became available which would mean that subsidies may not be necessary, or might, at least, be reduced.

Now is the time for thailand to kick those foreigners out of the country that propose land taxes.

Let me ask you, what is wrong with vacant land? Must every square meter of Thailand be made into a condo, office building, shopping center, factory or chemical fertilizer laden farm just to satisfy your Western socialist agenda?

All taxes gets passed on to the enduser. Nothing can be gained from land taxes except making the state more powerful.

Edited January 26, 2015 by Time Traveller

[FangFerang]

Then again the movement of land titles may also be individuals attempting to get ill gotten gains out of their names and thus reduce assets which may be siezed'The rice scam is reported to have put vast sums of money into the hands of indibviduals who were not entitled to it. Dobt much oft that cash went into the banking system, Of course there were other scams going on and many are being investigated, may be are lot of <deleted> puckered up awaiting results of investigations.

This inheritance tax has nothing to do with scams of any kind. It has everything to do with sheltering assets.

The simple reason is that no one leaves a paper trail for assets generated by corruption. Construction Bank of China, underground vaults, and hard assets in house safes (remember the dwindling pile of confiscated money last year from a politician's house safe?) -=- these are all well established money laundering techniques.

Note that all these these loopholes remain open, curiouser and curiouser to Alice and the rest of us.

Now that's fighting corruption for you!

Edited January 26, 2015 by FangFerang

[Gunna]

"They want to keep the cash to invest in other asset that will avoid the inheritance tax."

I can think of a few ways

Secret Overseas bank accounts

Thai bank accounts in some one else's name, eg the gardener or driver in an account they can't access

Gold in a well hidden safe

Gold and at death the family says that it had already been given to their children

[ramrod711]

Now is the time to address the issue of a property tax as well. A tax on vacant land, that is being held for speculative purposes, may well induce owners to develop or rent the land to farmers or small business. Farmers may see a reduction of rents as the land became available which would mean that subsidies may not be necessary, or might, at least, be reduced.

Now is the time for thailand to kick those foreigners out of the country that propose land taxes.

Let me ask you, what is wrong with vacant land? Must every square meter of Thailand be made into a condo, office building, shopping center, factory or chemical fertilizer laden farm just to satisfy your Western socialist agenda?

All taxes gets passed on to the enduser. Nothing can be gained from land taxes except making the state more powerful.

Excuse me for having an opinion, I thought that was what the forum was for. If you prefer to have rich folks from Bangkok buy up all the available land at major intersections, existing and future, surrounding your village, thus restricting growth, go for it sunshine. As for me, I'm not leaving, and if I ever do it won't be at your suggestion. Have a real nice day now.