Overview
The Land and Building Tax Act B.E. 2562 (the “LBTA”) was promulgated on 12 March 2019 and became effective on 1 January 2020 replacing the predecessors, including the House and Land Tax Act B.E. 2475, the Land Development Tax Act B.E. 2508 and related regulations with an aim at improving an efficiency on tax collection.

The owner or possessor of land and building as of 1 January of each year will be obliged to pay tax to the local authorities within 30 April, unless otherwise extended. 

Tax rates
Unlike the income-based approach as adopted by the previous regulations, the LBTA introduces a new assessment method based on the property's appraised value. In this connection, different categories of property will be subject to different tax rates to be announced and subject to the following ceilings:

1. 0.15% for agricultural purpose;
2. 0.30% for residential purpose;
3. 1.20% for other purposes; and
4. 1.20% for unused and vacant properties.

Exemptions
Apart from the transitional reduced tax rates during the first two years (i.e. 2020-2021), the LBTA provides tax exemptions in the following  cases: 

1. an individual who owns land or building for agricultural purpose is exempted from tax for the first three years (i.e. 2020-2022), following which an exemption up to Baht 50 million will apply; 
2. an individual who owns both land and building for residential purpose and whose name is on the house registration book as of 1 January in such year will receive an exemption up to Baht 50 million; and
3. an individual who owns only building (but not land) for the residential purpose and whose name is on the house registration book as of 1 January in such year will receive an exemption up to Baht 10 million.  

Relaxations
As a relief measures to alleviate the impact of COVID-19, the land and building tax for 2020 is reduced by 90%.  In addition, the LBTA provides further tax reductions in the following cases:

50% reduction applies to (i) residential property acquired by inheritance before 13 March 2019 and the owner is named on the house registration book; and (ii) property used for energy infrastructure projects such as reservoir and power plant; and

90% reduction applies to land or building used for certain purposes, including amongst others:  

1. pending for sale by qualified financial institutions and asset management company for a period not exceeding for 5 years from the date of acquisition;
2. being developed for a residential or industrial purposes, condominium project, industrial estate project for a period not exceeding three years from the date on which the relevant permit is granted;
3. providing certain services to the public (e.g. sport, zoo, amusement park, public parking and etc.); and
4. being developed for university or prescribed  private school.

 

This document is solely intended to provide an update on recent development in Thailand legislation and is not purported to provide a legal opinion, nor a legal advice to any person.