Questions continue about proposed new Land Tax Laws
The Thai Government remains committed to implementing a new property tax regime that will affect property owners throughout Thailand according to Finance Minister, Korn Chatikavanji. Some sources claim the bill has already gained the approval PM Abhisit Vejjajiva’s Cabinet and is being vetted by the Thai Attorney generals while others claim the law has yet to gain Cabinet approval. Either way, the possibility that the new law will take effect during the upcoming Parliamentary session is raising concerns among foreign and domestic property owners and investors. Purportedly the new law will exclude taxes on a residential owner’s residence (if he/she lives there for over 6 months a year) but increase taxes from .05% to 2% on other land and buildings. The aim of the law is to change the tax structure from one based upon individual’s income to one based upon their “wealth”. Some see the dramatic shift in tax policy, from the current system where 90% of tax revenues are generated by employment taxes to one based upon assets in real estate, as an attempt to placate the rural poor and increase Thailand’s political stability through economics . The law also aims to collect at least 20 Billion THB/year but Korn claims that 90% of property owners would be excluded from the tax increases. The planned revenues from the taxes will be distributed to “local administrations” as the Government aims to make them “self-sustaining” and reduce the central Government’s burden and role. Korn did admit the law faces opposition but is adamant that the change in necessary.
