Finance Ministry drafting windfall tax bill targeting property owners

[webfact]

Finance Ministry drafting windfall tax bill targeting property owners 
By The Nation

 

File photo : Kritsda

 

BANGKOK: -- The ministry is drafting a windfall tax bill that would result in the collection of taxes from property owners whose property prices appreciate due to government transport projects, said Kritsda Chinavicharana, director general of the Fiscal Policy Office. 

 

The tentative rate is about 5 per cent of the appreciation value.

 

Properties located close to transport routes such as railways, roads or airports would be subject to the new tax.

 

But the tax would only apply to properties that benefit from new government projects. 

 

Properties located near existing projects, such as Skytrain and underground train projects in Bangkok, would not be affected. 

 

He said the ministry will soon submit the bill for the Cabinet’s approval.

 

Source: http://www.nationmultimedia.com/news/business/30316627

 

-- © Copyright The Nation 2017-05-29

[leeneeds]

SUBMARINES are expensive toys,

[lovelomsak]

So who is going to be the judge if the properties went up for the reasons he stated or because the owners invested in upgrades ,or the neighbour grew in size and has became of more value. Who has the rights or knowledge to do this objectively?

[maewang99]

so we pay in both directions now.

positive externalities..... get taxed.

negative ones...... just kill you (pollution, corruption, cancer and then just to finish it all off..... Climate Change).

 

Edited May 29, 2017 by maewang99

[theguyfromanotherforum]

I fully expect a foreign property tax soon.

 

 

[MINIMIGLIA]

4 minutes ago, theguyfromanotherforum said:

I fully expect a foreign property tax soon.

 

 

Foreigners cannot own property, so will never happen. and I don't classify a flat as a property, you will never own the land it sits on.

[Tilacme]

So on top of families already record levels of household debt,  those en route of gov projects can expect a financial hit out of the clear blue sky.  Going to cause a lot of hardship.

[Tilacme]

37 minutes ago, MINIMIGLIA said:

Foreigners cannot own property, so will never happen. and I don't classify a flat as a property, you will never own the land it sits on.

could still qualify for uplift tax though.

[Misterwhisper]

Absolute financial desperation lies in the air. And it omits a mighty stench!

[dcnx]

53 minutes ago, MINIMIGLIA said:

Foreigners cannot own property, so will never happen. and I don't classify a flat as a property, you will never own the land it sits on.

That doesn't mean they can't tax the flat. 

 

Not saying they will, but they absolutely could and we would have no choice but to take it right in the backside.

[trogers]

1 hour ago, lovelomsak said:

So who is going to be the judge if the properties went up for the reasons he stated or because the owners invested in upgrades ,or the neighbour grew in size and has became of more value. Who has the rights or knowledge to do this objectively?

Tax is primarily on land values.

[webfact]

Proposed infra windfall tax raises concerns
By SOMLUCK SRIMALEE,
WICHIT CHAITRONG
THE NATION

 

File photo : Krisda

 

BANGKOK: -- ECONOMISTS and land developers are cautious about the Finance Ministry’s intention to impose a windfall tax on property owners who benefit from government infrastructure projects.

 

Sakon Waranyuwattana, dean of Thammasat University’s faculty of economics, said the new tax could duplicate those under the Land and Buildings Tax Bill, which is also being considered by the National Legislative Assembly, resulting in double taxation. 

 

The windfall tax bill being drafted by the Finance Ministry would result in the collection of taxes from property owners whose property values appreciate because of government transport projects, Krisda Chinavicharana, director-general of the Fiscal Policy Office, said yesterday. 

 

The tentative rate is about 5 per cent of the appreciation value.

 

Properties located within 5-6 kilometres of new transport routes such as railways, roads or airports would be subject to the new tax. Properties located near existing projects, such as the Skytrain and subway in Bangkok, would not be affected. 

 

Krisda said the ministry would soon submit the bill for the Cabinet’s approval.

 

Sakon said he was concerned that the new tax might be unfair to land developers and landowners who usually also pay income tax and transfer fees, which cost about 5-7 per cent of the appraisal price. 

 

“Should the Finance Ministry introduce the new tax, it has to take into account land and property tax and land transaction fees,” he said.

 

In principle, it is a good idea, as those whose land values rise from the development of the Eastern Economic Corridor, for example, should pay more tax. But implementing the levy would not be easy, he said.

 

Moreover, the government may need to look at fair compensation for landowners whose property is appropriated by the state.

 

Meanwhile, Thai Condominium Association president Prasert Taedullayasatit, who is also chief executive officer of Pruksa Real Estate, said the government could already collect additional tax that reflects the value of land rising from infrastructure improvements, so it did not need a windfall tax.

 

He said the Treasury Department of the Finance Ministry revised land appraisals every four years, and these revisions reflect how the land values have benefited from infrastructure projects. If the government wants more revenue from land development, it does not need new tax legislation but only has to revise land appraisals every year, he said.

 

Normally, officially appraised land values are 5-20 per cent lower than market prices, depending on location. In some locations, the market price may be lower than the appraised value but in some locations it may be 100 per cent higher, Prasert said.

 

If the government introduces a windfall tax, it will mean double taxation and will increase the cost of developing residential projects, which in turn will mean people have to pay more to buy a home, he said.

 

He also said the government should concentrate on the land and building tax, which is expected to come into force in the next few years.

 

Currently, land developers have to pay a 2-per-cent transfer fee when buying undeveloped land from landowners, a 1-per-cent mortgage fee, and a special business tax of 3.3 per cent, as well as corporate income tax. Homebuyers have to pay a transfer fee of 2 per cent of the home’s value and a mortgage fee of 1 per cent. 

 

Source: http://www.nationmultimedia.com/news/business/EconomyAndTourism/30316670

 

-- © Copyright The Nation 2017-05-30

[Laab Muu]

It's obviously just to get it on the books and then leave it gathering dust until needed in suspected cases of people buying up land/property for cheap (through inside knowledge) in places where projects are then announced to be built.

[grumbleweed]

16 hours ago, lovelomsak said:

So who is going to be the judge if the properties went up for the reasons he stated or because the owners invested in upgrades ,or the neighbour grew in size and has became of more value. Who has the rights or knowledge to do this objectively?

Good question and the psychic in me says whoever it is will have an affinity with brown envelopes

[Pib]

16 hours ago, MINIMIGLIA said:

Foreigners cannot own property, so will never happen. and I don't classify a flat as a property, you will never own the land it sits on.

I expect the definition is "not" just land.  Instead, buildings "and/or" land.   Property taxes I'm use to apply to the land and any buildings on the land.   Condos/flats are in buildings...therefore, property tax would apply.

[Pib]

I think below web site gives a good overview of Thailand property taxes...current and some of the proposed changes.

Property Tax: Building and Land Tax

[Reigntax]

So do they get a tax refund due to government lack of, or failure to maintain existing infrastructure?

[kingstonkid]

I think a property tax on ALL properties is a good thing.  It would pay for more repairs to streets and such.  You could then also pay police more so they do nnot need the t money as much.

 

It might also make people sitting with huge properties going to waste thinking about them.  Even a .05% across the board would not be that arduous but would bring in huge amounts of money to the government leaving the personal income tax lower.

05 on 1 million  is 5000 baht

[Pib]

57 minutes ago, kingstonkid said:

I think a property tax on ALL properties is a good thing.  It would pay for more repairs to streets and such.  You could then also pay police more so they do nnot need the t money as much.

 

It might also make people sitting with huge properties going to waste thinking about them.  Even a .05% across the board would not be that arduous but would bring in huge amounts of money to the government leaving the personal income tax lower.

05 on 1 million  is 5000 baht

Who said the property taxes go to repair of streets and such.  Expect it just goes into the general treasury to be used for whatever....even more submarines.