The Treasury Department has reassured that a new method for appraising land and buildings will not result in higher land and building tax rates as several parties have suggested, while the Fiscal Policy Office (FPO) estimates about Bt40 billion per year in additional government revenues for the first two years from 2020 when the taxes bill takes effect.
Amnuay Preemonwong, the Treasury Department’s director-general, said that appraised building prices will be lower than the actual construction cost, resulting in the actual tax being lower than some had predicted. The appraised value of buildings will be based on its width and length regardless of the construction materials used.
The land and building tax bill will come into force from January 1, 2020 onwards.
So far, Treasury Department has appraised 20 million plots of land, with a further 13.4 million plots expected to be appraised this year.
Local officers will walk the streets to survey every house and building in the relevant areas. The categories of buildings have been cut to 31 from 69 for easier appraisal.
Amnuay said that area officers must survey and appraise every building in their areas, including those where the combined cost of residence and land is at or below Bt50 and so is tax exempt.
Meanwhile, according to the land and building law, a second house will be taxed from the value of the first baht of land and building, making it necessary to appraise every building in the country.
Amnuay also said that the new land appraisal bill, which has passed its third reading in the National Legislative Assembly (NLA), will shorten the approval period for appraised land prices and for appeals on those values, which will end at the provincial level. In the previous approach, a central committee gave approval.
In the first two years after the land and building tax bill comes into force on January 1, 2020, the government is expected to earn Bt40 billion per year from the land and building tax collection, according to the FPO.
Currently, the government revenue from the building and land tax, and the local development tax, amounts to a combined Bt30 billion.
Although the government revenue from the land and building tax is expected to be higher than in the previous system, the estimated collection is lower than the FPO’s earlier estimate of Bt60-Bt70 billion after the NLA changed the draft tax bill in response to developer pressure.
Meanwhile, the Treasury Department is moving ahead to develop a senior’s complex on a 72-rai (11.5-hectare) plot of state-owned land, while hurrying to soon finalise the first phase with Ramathibodi Hospital in Samut Prakan province after a delay of nearly three years.
The senior’s project will be implemented through a public-private partnership (PPP) scheme. The selling price per unit will include medical service fees. However, the hospital has not yet decided on the medical options in details and the costs to their ageing residents.
Other project details such as the conditions for leaving the project – voluntarily leaving or passing away, fee return, etc – also remain under consideration.
The land in this project will be rented by the department at Bt1 monthly per square wa, with the rental arrangement fee at twice that of the annual rent. It consists of three zones – the 32-rai hospital zone, 20-rai senior’s housing zone and 10-rai nursing zone.
The senior’s housing zone will consist of 1,000 units of 30-55 square metres each. It is expected to be open to rental by middle- to high-income people aged 55 years and above for a 30-year period or until they pass away.