New Land and Building Tax Act

On 12 March 2019, the Land and Building Tax Act, 2562 B.E., was published in the Government Gazette, and became effective on the following day. However, tax collection for land and buildings under this Act will come into effect on 1 January 2020. This Act replaces the current House and Land Tax and Land Development Tax.

Keywords: Mazars, Thailand, Land and Building Tax, Government Gazette, Land Code

Ministerial regulations and announcements under this Act shall be completed within 120 days of the date that this Act comes into force.  

Person liable to tax

Any individual or legal entity who owns, possesses, or has usage rights of land or buildings, including condominium units, on 1 January of any year is responsible for paying land and building tax to the local administrative authorities for that year, as specified in the Act.

Tax base

The base for calculating the land and building tax is the assessed value of the land, buildings, or condominium units as determined by the governmental authority for the collection of registration fees according to the Land Code.

For land and buildings which do not have an assessed value, the value shall be determined according to rules, procedures, and conditions prescribed in a ministerial regulation.

Tax rates

The land and building tax rates shall be specified in a Royal Decree, but shall not exceed the maximum tax rates, which are as follows:

Purpose of use of land and buildings

Maximum tax rate

Agricultural use

0.15%

Residential use

0.3%

Other

1.2%

Vacant or unused

1.2%

For land or buildings which are vacant or unused for more than 3 consecutive years, the tax rates will increase by 0.3% every three years, but will not exceed 3%. 

For the first 2 years of the collection of tax on land and buildings under this Act, the following rates shall be used:

1. Land or buildings for agricultural use:

Land Value

Tax Rate

THB 1 million – THB 75 million

0.01%

THB 76 million – THB 100 million

0.03%

THB 101 million – THB 500 million

0.05%

THB 501 million – THB 1 billion

0.07%

More than THB 1 billion

0.1%

Land or buildings owned by individuals for agricultural use shall be exempt from tax for the first three years.

2. Land and buildings owned by individuals for residential use whose names are on the household registration documents:

Land Value

Tax Rate

THB 1 million – THB 25 million

0.03%

THB 26 million – THB 50 million

0.05%

More than THB 50 million

0.1%

3. Buildings owned by individuals for residential use whose names are on the household registration documents:

Land Value

Tax Rate

THB 1 million – THB 40 million

0.02%

THB 41 million – THB 65 million

0.03%

THB 66 million – THB 90 million

0.05%

More than THB 90 million

0.1%

4. Land or buildings for residential use other than in points 2 and 3 above:

Land Value

Tax Rate

THB 1 million – THB 50 million

0.02%

THB 51 million – THB 75 million

0.03%

THB 76 million – THB 100 million

0.05%

More than THB 100 million

0.1%

5. Land or buildings for other use:

Land Value

Tax Rate

THB 1 million – THB 50 million

0.3%

THB 51 million – THB 200 million

0.4%

THB 201 million – THB 1,000 million

0.5%

THB 1,001 million – THB 5,000 million

0.6%

More than THB 5,000 million

0.7%

6. Vacant or unused land or buildings:

Land Value

Tax Rate

THB 1 million – THB 50 million

0.3%

THB 51 million – THB 200 million

0.4%

THB 201 million – THB 1,000 million

0.5%

THB 1,001 million – THB 5,000 million

0.6%

More than THB 5,000 million

0.7%

Tax exemptions

Tax exemptions will apply in the following cases:

Property

Tax-exempt value

Land and buildings owned by individuals for agricultural use

Not more than THB 50 million

Land and buildings owned by individuals for residential use, whose names are on the household registration documents on 1 January of that tax year

Not more than THB 50 million

Buildings owned by individuals for residential use, whose names are on household registration documents on 1 January of that tax year, but the land is owned by another person

Not more than THB 10 million

Tax calculation

The tax payable shall be calculated from the net tax base after deducting the tax-exempt value, multiplied by the applicable tax rate.

If a property is used for several purposes, tax shall be levied in proportion to the area used for each purpose according to the rules and procedures specified by the Minister of Finance and the Minister of the Interior.

Tax payment

The local governmental authorities shall send a form notifying the taxpayer of the tax assessed by February of each year. The form shall be in accordance with that announced by the Minister of the Interior, and shall contain at least a list of land or buildings, the appraisal value, the tax rate, and amount of tax payable. The taxpayer must pay the tax as set out in the notice of tax assessment by April of each year.

For the first 3 years, if the assessed tax is higher than the house and land tax or the local maintenance tax payable in the year before tax is payable under this Act, the taxpayer shall pay tax based on the tax payable in the previous year, and the balance shall be paid as follows:

  • First year – 25% of the balance
  • Second year – 50% of the balance
  • Third year – 75% of the balance

Penalty and surcharge for late tax payment

If the tax is not paid by the specified period, there will be a penalty of 40% of the tax payable except in the following cases:

  • If the tax is paid before receiving a warning letter, the penalty will be 10%.
  • If the tax is paid by the period specified in a warning letter, the penalty will be 20%.

The penalty may be waived or reduced according to the ministerial regulations.

There is also a surcharge of 1% per month of tax payable for late payment. Part of a month is counted as a whole month. The surcharge shall be capped at the amount of tax payable.

If the tax is not paid, the transfer of ownership or rights of possession for land or buildings cannot be registered. 

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