No tax reduction for land and buildings for 2022

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Tax base and tax rate under the Law on Property Tax and Building

In 2019, Thailand implemented the Land and Property Taxation Act BE 2562 (2019) (the “Act”) to collect tax on land and buildings located throughout the country. The law entered into force on January 1, 2020. Any person (including a legal person) whose name appears to own or own such land or buildings on January 1 of each year is responsible for paying the corresponding tax (Article 9 of the law) .

The taxable base of land and buildings for tax calculation purposes is the total value of the land or buildings, as follows (Article 35 of the Law):

  • a) In the case of land, the pre-assessed value of the land shall be used as the basis of calculation;
  • b) In the case of a building, the pre-assessed value of the building must be used as the basis of calculation; and
  • c) In the case of a building that is a condominium unit, the pre-assessed value of the condominium unit must be used as the basis of calculation.

In the case of land or a building that does not have a pre-assessed value, the calculation of the value must comply with the rules, procedures and conditions prescribed in the relevant ministerial regulation.

The pre-assessed value of land, building or building which is a unit of condominium shall be by reference to the pre-assessed value of real estate for the purpose of levying registration fees rights and legal acts under the Land Act. Code, as set by the Changwat Sub-Committee with the approval of the Property Assessed Value Setting Committee.

Once the base has been established, it is subject to tax at the following rates (article 37 of the law):

  • a) Land or a building used for agricultural purposes is subject to a tax rate not exceeding 0.15% of the tax base;
  • b) Land or a building for residential use is subject to a tax rate not exceeding 0.3% of the tax base;
  • c) Land or a building used otherwise than in (1) or (2) is subject to a tax rate not exceeding 1.2% of the tax base; and
  • d) Land or a building left vacant or unused but otherwise reasonable given its condition is subject to a tax rate not exceeding 1.2% of the tax base.

Thereafter, the local government organization must notify the taxpayer no later than February each year (Section 44 of the Act) when the tax is to be paid no later than April each year (Section 46 of the Act). In addition, the following persons are required to pay tax on behalf of the taxpayer (Article 47):

  • 1) The administrator of the estate or of the heirs in the event of the taxpayer’s death;
  • 2) The property manager in the event that the taxpayer is an absent person within the meaning of the Civil and Commercial Code concerning the disappearance;
  • 3) The legal representative, tutor or curator in the case where the taxpayer is a minor, an incompetent or a quasi-incapable, as the case may be;
  • 4) The representative of a legal person in the case where the taxpayer is a legal person;
  • 5) The liquidator in the case where the taxpayer is a legal person dissolved by liquidation; and
  • 6) Any co-owner in the case where the building subject to the tax belongs to several people.

The taxpayer must pay the assessed tax to a local government organization at a place such as, but not limited to, the municipal office, sub-district administrative organization, district office, and Pattaya City Hall.

Consequences for unpaid tax

Any tax not paid within the time allowed is considered as a tax arrears (article 58 of the law). Please note that any tax arrears may prevent the owner from registering rights or legal acts when transferring ownership or right of possession to the land or building (Article 60 of the Law). In the worst case, the local administrator will have the power to issue a written order for seizure, seizure and auction of the taxpayer’s property for the purpose of applying the proceeds to the payment of tax arrears, penalty, of the sums and additional costs incurred during the seizure, seizure and auction of these goods (article 62 of the law).

In addition, the taxpayer who fails to pay the tax within the specified time is also subject to the penalty and additional money as follows:

  • 1) 40% of the amount of tax arrears, except for the taxpayer who paid the tax before receiving a written warning under section 61 of the law, who will be subject to 10% of the amount of the tax arrears (section 68 of the Act);
  • 2) 20% of the amount of overdue tax in the event that such tax is paid within the time specified in the written warning under Section 61 of the Act (Section 69 of the Act); and
  • 3) Additional money in the amount of one percent per month of delinquent tax.

Reduction of tax under the Act

In any case, the law also allows the government to issue a royal decree to reduce the amount of tax on certain types of land and buildings suited to economic or social needs, events, businesses or local conditions. This reduction must not exceed 90% of the amount of tax to be paid (article 55 of the law).

In this respect, a Royal Decree of Tax Reduction for certain types of Land and Buildings (“Royal Decree n°1”) was published on June 9, 2020 in order to reduce by 90% the collection of tax in 2020 on the following elements :

  • 1) Land or building for agricultural purposes;
  • 2) Land or building for residential use;
  • 3) Land or building for purposes other than (1) or (2); and
  • 4) Land or building that has been abandoned or not properly used.

In accordance with the above, a Royal Decree of tax reduction for certain types of land and buildings No. 2 (“Royal Decree No. 2”) was published on January 30, 2021 in order to reduce the collection of tax by 90% in 2021. on the same items; however, there is no such reduction in 2022.

A Royal Decree for the Land and Buildings Tax Rate (“Royal Decree 2022”) was issued on December 10, 2021 to set the Land and Buildings Tax Rate for 2022 and beyond as follows :

1. Land or building for agricultural purposes
Appraisal value or tax base (THB) Tax rate (%)
0.01
> 75 – 100 million 0.03
> 100 – 500 million 0.05
> 500 – 1,000 million 0.07
> one billion 0.1
2. Land or building for residential purposes
A. Land or building whose owner, an ordinary person, uses as his residence and whose name appears in the register of households under the laws of civil status.
Appraisal value or tax base (THB) Tax rate (%)
0.03
> 25 – 50 million 0.05
> 50 million 0.1
B. Immovable whose owner, an ordinary person, uses for residence and whose name appears in the register of households under the laws of civil status.
Appraisal value or tax base (THB) Tax rate (%)
0.02
> 40 – 60 million 0.03
> 60 – 90 million 0.05
> 90 million 0.1
C. Land or building used for residential purposes other than (A) and (B)
Appraisal value or tax base (THB) Tax rate (%)
0.01
> 75 – 100 million 0.03
> 100 – 500 million 0.05
3. Land or building for purposes other than (1) or (2).
Appraisal value or tax base (THB) Tax rate (%)
0.3
> 50 – 200 million 0.4
> 200 – 1,000 million 0.5
> 1 – 5 billion 0.6
> five billion 0.7
4. Abandoned or misused land or building
Appraisal value or tax base (THB) Tax rate (%)
0.3
> 50 – 200 million 0.4
> 200 – 1,000 million 0.5
> 1 – 5 billion 0.6
> five billion 0.7

Please note that in the absence of tax reduction provisions in the Royal Decree 2022, it appears that there will be no tax reduction from 2022; however, the following discounts remain unchanged:

  • 1) An ordinary person who owns land and buildings with an appraised value not exceeding THB 50,000,000 for agricultural purposes.
  • 2) An ordinary person who owns both land and buildings with an appraised value not exceeding THB 50,000,000 for residential purposes, and whose name appears in the household register as of January 1 this year .
  • 3) An ordinary person who only owns real estate whose appraised value does not exceed THB 10,000,000 for residential purposes and whose name appears in the household register as of January 1 of this year.
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