On The Up & Up!
In spite of the ever present building and land tax, land rates in Bangkok’s major locations are projected to show a continuous rise over the coming year.
Knight Frank Chartered’s (Thailand) managing director of property consultant, Phanom Kanjanathiemthao, states that the building and land tax, which is supposed to be levied on the 1st of January 2017, is unlikely to force land owners to sell their plots of land in a hurry.
Designed to increase the taxpayer base nationally, the long-overdue tax had won the approval of the cabinet this June. It set ceiling rates of 0.5% for residences, 5% for undeveloped or vacant land, 2% for commercial and 0.2% (calculated on the appraisal value) for agricultural land.
This building and land tax is set to be levied on agricultural land and primary homes with appraisals priced in upwards of 50 million THB. Owners of agricultural farms and primary homes with an appraisal price lower than 50 million THB will be exempted from paying this tax.
Owners of second homes will also be required to pay this tax progressively, with homes having appraisal values ranging from below 5 million THB to those above 100 million THB required to pay rates as low as 0.03% to as high as 0.30% respectively.
For undeveloped or vacant land, tax rate will be levied at 1% for 1 to 3 years, 2% for 4 to 6 years & 3% for in excess of 7 years.
BTS Group Holding Plc’s chief operating officer, Rangsin Kritalug, said that land prices in many a instance are unaffordable.
AP (Thailand) Plc, a condo business group’s head, Vittakarn Chandavimol, speaking on the same topic said that while purchasing land plots his company does not restrict the price limit because by doing so, he believes, it restricts the company’s development potential.
For expensive plots of land, Vittakarn Chandavimol says that his company applies a ratio of a bonus floor area to help boost its area of construction. The company plans to further use buildings designed efficiently to help maximise its land use as well as deliver affordably priced units to buyers.
Mr Phanom has stated that the ceiling price does not exist for a plot of land that has no willing buyer. Confident condo developers will acquire the asking prices they seek for their units.
While some prices of plots surge by 30 to 40% a year, developers in some locations might need to consider other developmentalternatives or keep a lid on them until the prices of condos become acceptable to buyers.
Censutury 21 Realty Affiliates’s (Thailand) chief executive, Kitisak Jampathipphong says that plots of land in optimum locations like Ploenchit, Wireless Road and Chidlom are still high because of limited supply.
CBRE’s (Thailand) head of land and investment services cum executive director, Kulwadee Sawangsri, says that land prices in major locations have increased every year, while prices in 2016 will not yet reach the 3 million THB per sqw mark.
Keywords – Land Tax, THB, Thailand