New tax reduction on land and buildings comes into effect

Published: 21 March 2023 at 04:09:09

The 15% reduction in land and building tax has taken effect, Fiscal Office (FPO) director general Pornchai Thiravedja said. The Cabinet approved the tax reduction decree in December last year. The law was published in the Royal Gazette on March 18 and came into effect on March 19. The law applies to the payment of taxes this year on land and buildings, including agricultural land, residential land, commercial land and land without development.

For certain types of parcels that were eligible for a 50% tax abatement under the previous ordinance, they will enjoy this 15% tax abatement in addition to the 50% tax abatement. This includes land for the construction of power plants. However''Certain parcels that have had a 90% tax reduction will not be eligible for a 15% tax reduction under this ordinance. This includes allocated land plots for the development of residential projects that have received a 90% tax cut for up to three years.

This latest tax cut will cost local governments 6.28 billion baht, which the Budget Bureau will offset, Mr. Pornchai said.

The government has cut land and building tax by 90% in 2020-21 to mitigate the impact of the pandemic.

Current tax'. 'is calculated at staggered rates that vary depending on the value of land and construction. The maximum tax rate for agricultural land is 0.15% and the effective rate is 0.01-0.1%. A land owner is exempt from the tax if he or she is an individual and the value of the land does not exceed 50 million baht.

The maximum tax rate for residential plots is 0.3% and the effective rate is 0.02-0.1%. Owners of first houses are exempted from property tax on land and buildings up to a value of 50 million baht.

The maximum tax rate on commercial and industrial land and land without development is 1.2% and the effective rate is 0.3-0.7%.

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