The new land and building tax is not likely to affect the self-built home unit with homes valued 50 million baht or higher. But the Home Builder Association says the tax may impact buyers who are purchasing land plots with the intention of building a home in the future.
Wisit Monaiyapong, honorary director, says buyers who are looking to build a home with a value of 50 million baht or higher have high purchasing power and would be able to pay the tax anyway.
The land and building tax was approved by the cabinet last Tuesday with the intention of expanding the national taxpayer base.
The tax will take effect next year and set new ceiling rates for appraisal values: 0.2% for agricultural land, 2% for commercial land, 0.5% for residences and 5% for undeveloped or vacant land.
Taxes will first be levied on homes and agricultural land with values of 50 million baht or higher. The rate will be applied to the amount exceeding the 50 million baht mark.
The tax will also affect second homes, with rates of 0.3% – 0.30% for homes valued at less than 5 million baht to over 100 million baht.
Undeveloped or vacant land will be taxed at: 1% if left vacant for 1-3 years, 2% for 4-6 years of vacancy and 3% for 7+ years of vacancy.
The new tax on vacant land, according to Mr. Wisit, will have a positive effect on the self-built home market in two ways. Those who already own a vacant plot will speed up their decision to build in order to avoid paying the tax. Buyers who are looking for plots will also have more options, as many landowners will be selling their plots to also avoid paying the tax.