Thailand
Thailand: New tax worries private players
The private sector remains concerned about a draft bill on the land and buildings tax, particularly about a provision that lets local authorities handle price appraisals, which may result in inconsistent treatment.
They are also worried about the readiness of local administrations in terms of the number of staff to perform the various duties such as tax evaluation and collection, plus an interpretation of vacant land plots that will have agricultural use or be rented out for agricultural purposes.
“The government should make the law simple and easy and acceptable among taxpayers,” said Atip Bijanonda, director of the Thai Chamber of Commerce.
According to Mr Atip, who is also president of the Housing Business Association, the Thai Chamber of Commerce is gathering issues of concern related to the new land and buildings tax, which they have found to still contain confusing issues that might have an impact on the business sector, to present to the National Legislative Assembly by October.
The Thai Chamber of Commerce will summarise the issues that will be collected from questionnaires sent to 145 commerce associations nationwide, of which more than 38,000 companies are members.
Wilawan Veerakun, director of the Bureau of Property Valuation at the Treasury Department, said the bureau will complete price appraisals for land plots nationwide this year in preparation for the land and buildings tax bill, which will come into force in January 2018.
“People should not be worried much about a possible rise in the new appraisal prices, as the new appraisal prices will be still lower than market prices,” Ms Wilawan said. “Prices were appraised by referring to transactions people made.”
Apart from the price appraisal of land, there will be two other categories used, building appraisals and condominium appraisals, she said.
For buildings, one price will be used nationwide, in the range of 7,200-7,800 baht per square metre, and building materials will not be used as a method of categorisation, as in the previous draft.
However, there will be depreciation pricing for residential units, which will be categorised by materials. For example, concrete houses will be devalued to 24% of the appraisal price after 40 years. For wooden houses, the term will be 18 years.
Building appraisal prices will be 8,900 baht per sq m for hotels and 9,350 baht per sq m for shopping malls.
“Appraised prices for condos will reflect market prices the most, as prices will be gauged with reference to sale-purchase contracts developers use,” Ms Wilawan said.
There are 2,000 condo buildings in Bangkok, of which 80% have not had adjustments in appraisal prices yet. Some 800 buildings have been revised, appraisal prices of which will be announced on the Treasury Department’s website on Sept 1.
Low-end condos will have an appraisal price of lower than 35,000 baht per sq m, Ms Wilawan said.
She said all local administrations nationwide with more than 1,700 employees have better knowledge about the appraisal prices of buildings because the bureau has trained them.
Source: http://www.bangkokpost.com/business/news/1315367/new-tax-worries-private-players