Developers seek gradual rise in land, building tax

Property developers have urged the government to reconsider full collection of the land and building tax, suggesting a step-by-step increase, starting from a discounted rate of 50-75% during 2023-25 as the economy is fragile.

Developers seek gradual rise in land, building tax
Property

Developers seek gradual rise in land, building tax

published : 16 Sep 2022 at 04:00

newspaper section: Business

writer: Kanana Katharangsiporn

Property developers have urged the government to reconsider full collection of the land and building tax, suggesting a step-by-step increase, starting from a discounted rate of 50-75% during 2023-25 as the economy is fragile.

Issara Boonyoung, chairman of the committee for real estate development at the Thai Chamber of Commerce, said the economy has not yet recovered to the pre-pandemic level.

"Earlier this year we asked the government to extend tax reductions until after the rate returns to normal in 2022," he said. "But our request was not approved. We are making the request again because the economy is still sluggish."

Mr Issara said while waiting for the economy to revive, tax collection should be 50% of the usual rate in 2023, gradually increasing to 75% in 2025 to minimise the burden for many businesses still struggling with the impact of the pandemic.

The tax rate for residential units, of which construction is complete but remain unsold, should be considered a residential use which will have a tax of 0.02%, rather than other use which will have a tax of 0.3%, the same rate as commercial use.

"Some issues in the land and building tax should be revised, for example, a gate in front of a housing project is not exempt from tax but land used for utilities in industrial estates such as waste water management which usually generate income to owners is exempt," he said.

For owners of vacant land in locations where the tax rate is high, they should allow local administrations to use their land for public use with a contract for a certain period in order to save cost from tax payment, Mr Issara said.

Many landowners, mostly those with high appraisal prices, try to offload the tax burden by planting trees on their land to turn plots into farms which will get a lower tax rate than other uses.

Aim Charoenthongtrakul, senior expert on tax system development at the Fiscal Policy Office, said that the office is considering a request from the Bangkok Metropolitan Authority (BMA).

"The BMA discussed with us about the use of some land which is not relevant to its location or city zoning," she said.

"We have yet to finalise our consideration."

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