Lower house value tax trigger sought

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Lower house value tax trigger sought 
By   THE NATION

 

BANGKOK: -- THE Finance Ministry has suggested to the National Legislative Assembly’s monetary and fiscal committee to lower the value of houses from the proposed minimum of Bt50 million to Bt10 million for levying the land and buildings tax.

 

The property sector also proposed to the ministry to clarify the tax status of completely built houses in stock.

 

Speaking at a special lecture on the impact of the land and buildings tax bill on property development, Pornchai Thiraveja, deputy director-general at the ministry’s Fiscal Policy Office (FPO), said the NLA panel was reviewing the proposed shift in taxation conditions for residences.

 

The tax rate has been proposed for property values that exceeded Bt10 million from the earlier Bt50 million, he said. 

 

There will be studies and discussions before finalising the condition, he said, adding this will take effect for tax collection in 2019. 

The proposed change aims to expand the national taxpayer base. 

 

Issara Boonyoung, an adviser to the Business Housing Association, said that there was agreement on the proposed shift as it would not have an impact on low-income earners.

 

Based on a recent survey, an estimated 11,000 residential units had an appraised value of more than Bt50 million each, while about 90 per cent of total residences in the system were those priced less than Bt5 million.

 

Earlier, the land and buildings tax bill set ceiling rates of 0.05 per cent of appraised value on land used for agricultural purposes, 0.1 per cent for residences and 0.5 per cent for general purposes. 

 

Local administrative organisations will need to have tools for land surveys like farmers’ registration to prevent tax avoidance, Pornchai said. 

 

As far as vacant or undeveloped land is concerned, the tax rate will be imposed at no less than the rate for general purposes but not more than 0.5 per cent on land left vacant or unused for 1-3 years.

 

Pornchai said the ministry expects the bill, which will come into force in the next two years, to encourage the private sector to develop more property projects.

 

He added that a guideline for higher land and building tax collection was proposed by the National Reform Steering Assembly for study by the FPO but the results of the study are not known yet.

 

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 the government’s infrastructure projects. 

 

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. 

 

 According to the proposed guidelines for the government’s infrastructure development projects, windfall tax – not exceeding 5 per cent – will be levied on transactions involving land and buildings or more investment for commercial purpose,.Issara said the three property associations had asked the ministry to discuss with the committee on clearly defining the tax to be levied on land for agricultural purposes. 

He raised questions on whether landowners who rented their plots to others for agricultural purposes would also be liable to pay the tax. 

He said if such a tax were to be levied, landowners may hire others for farming and this would generate employment for more workers.

With regard to residential units, Issara urged the government to clearly define completely-built homes or condominiums awaiting sales on whether they are for residential or commercial purpose. He also suggested that the tax on land earmarked for property development be levied from the date permission was given for construction, and not from the date of land purchase, as the purpose for purchase of land could change.

 

Source: http://www.nationmultimedia.com/news/business/EconomyAndTourism/30316862

 

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