Measures to deal with land tax and buildings: case studies

                    As I have previously written an article on knowledge about land and building taxes and countermeasures in Bank Finance,

                    There is now news appearing in many media outlets that this land and buildings law that will come into effect in 2563 will not be able to collect full taxes. This is because wealthy landowners set up companies to evade land and building taxes.

                    In fact, these news stories may mislead readers into thinking that Holding land in the name of a company is more beneficial than holding land in the name of an individual. But the truth is From the point of view of land and building taxes Individuals will benefit more.

                    However, the fact that the company has been established in the past two years is evident. It is caused by government measures that passed a law exempting income tax and transfer fees. Specific business tax and stamp duty Including Value Added Tax for those conducting business under the name of an individual to form a company. with the aim that Once a company is established, it becomes more difficult to evade or avoid taxes.

                    Establishing a company to conduct agricultural, commercial or other business is better than conducting business as an individual. Because the current income tax rate according to Thai law is still different between ordinary people and juristic persons that are limited companies, whether it be the tax rate, deductions, expenses, and various allowances.

                    When landowners transfer land to companies to conduct business, they can reduce their income tax rates. But in the same way The government is also able to collect complete corporate income tax. Because accounting is done, accounting submissions and audits are made easier.

                    In this article, I will present a case study of land and property tax measures for readers to consider and study. When the property and building tax comes into effect in 2563, what steps will income earners take in order to pay less tax legally?

Case study 1

                    Mr. Mangkhang Ruaymaiyok is the owner of land and 4 residences. The said land and buildings have an appraised value of 200 million baht, 150 million baht, 100 million baht, and the house and land that Mr. Mangkhang uses as his main residence. and has an appraised value of 30 million baht

                    Please consider the chart of Mr. Mangkhang's tax burden. The case where the house registration was not moved to a house with a high value compared to the case where Mr. Mangkhang planned the property tax by moving his name to the house registration with the highest value, which was 200 million baht.

                    However, the tax burden in 2563 after tax planning may not change much from the original. Unless in 2563 the maximum tax rate (ceiling rate) for residential real estate at the rate of 0.3 percent is enforced, tax planning will help save more taxes.

 Case study 2

                    In the case that Mr. Mangkhang has vacant land with an appraised value of 100 million baht, the land and building tax burden will be very high. Mr. Mangkong should consider taking the following actions:

Case study 3

                    Mr. Mangkhang has a house and land that is not used as a main residence but is also used as an office building, with an appraised value of 50 million baht.

In this case, Mr. Mangkhang has to pay taxes in proportion to actual use.

 Case study 4

                    Mr. Ruay has 2 more children who are of legal age. Mr. Ruay Ruay has assets including: House and land with appraised value of 100 million baht, house and land with appraised value of 250 million baht, house and land with appraised value of 150 million baht and another 200 million baht in cash if Mr. Ruay wants to reduce his current real estate tax burden. and managing future inheritance taxes

            Mr. Ruay may consider taking the following actions:

            1. Gradually transfer the house and land to both children. Mr. Ruay will receive benefits exempting the first 20 million baht from being included in the calculation of the tax base per child. The appraised value in excess of 20 million baht is legally entitled to pay transfer tax at a flat rate of 5 percent.

            But you must consider the fee for transferring real estate to your legal child who must pay a transfer registration fee of 0.5 and a stamp duty of 0.5 equal to 1 percent of the appraised value.

2. Gradually give cash to your children, not exceeding 20 million baht per year.

             If Mr. Rich waits for assets to be inherited, there will be a tax burden as per the chart on the back.

conclusion

            From the above case study, it can be seen that Land and building taxes are taxes that are collected at a relatively low rate. For those planning land and building taxes, they must consider the worthiness and value of the land they hold. Establishing a company to receive land transfer is only useful for land used for agriculture or commerce with a high value and in order to reduce the burden of inheritance tax in cases where the inheritance value exceeds 100 million baht only.

            The advantage of this law is that it will allow vacant land to be converted into agricultural, commercial or residential land. which brings more benefits to the country than leaving the land fallow.

              In the future, if the government wishes to increase income from local government organizations, it is very necessary to Adjust higher tax rates, especially taxes on undeveloped land and expand the residential tax base.