REALTY: BANGKOK – Appraisals lower than market price

Appraisal prices of buildings, which are used to compute the land and buildings tax, will be lower than the market prices to help taxpayers avoid paying too much tax, says the Treasury Department.

The appraisal prices will be based on buildings’ width and height regardless of materials and decoration, meaning they are flat rates, said director-general Amnuay Preemonwong.

Take a single detached home as an example. Its appraisal price could be 7,500 baht per square metre, well below the current market price of at least 10,000 baht per sq m, he said.

To make it easier for local administra- tive officers to appraise buildings and reduce discretion, the department decreased the number of building models from 69 to 31, said Mr Amnuay.

The land and buildings tax, scheduled to come into force from Jan 1, 2020, will replace the house and land tax and the local development tax, which have drawn criticism for being outdated.

To facilitate the land and buildings tax, the department is evaluating 33.4 million land parcels nationwide, of which 13.4 million are under review, he said.

According to the approved version, land and buildings used for residences with appraisal prices of up to 50 million baht will be tax exempt for principal homes, while those valued at 50-75 million baht will be taxed at 0.03%, 75-100 million baht at 0.05% and 100 million baht or above at 0.1%.

If owners have more than one home, the second and subsequent residences will be subject to 0.02% tax for those with an appraisal price of up to 50 million baht.

Tax rates will be applied the same as for principal homes for appraisal prices above 50 million baht.

Principal homes are defined as residences where the owners’ names are listed on the household registration.

The Fiscal Policy Office estimated earlier the new property tax will generate 40 billion baht a year during 2020-21, up from 30 billion earned from the house and land tax as well as the local development tax.

Mr Amnuay said a new law on land price appraisal, which has already passed the National Legislative Assembly’s three readings, will shorten the appraisal process by authorising provincial appraisal officers to make a final decision on homeowner appeals instead of a central committee.