Strategies for dealing with land and building tax laws in 2566

By Dr. Sathit Phongthanya, Senior Director, Estate Planning Family Office, Siam Commercial Bank.

If we plan and manage the land well That land may be another source of income for us and we can use that income to pay land and building taxes.

Land is an asset that is often bought by wealthy people in order to make a profit from selling it. developed for use or to pass on to children and grandchildren In the past, most of the land held was vacant land. Later, when the Land and Buildings Law came into effect on January 1, 2563

Many land owners are beginning to make efforts to make more use of abandoned land, such as developing it into a night market. It must be admitted that this idea is popular and it turns out that most people like to go for a walk quite a lot. It is also a tourist attraction for foreign tourists.

The use of such land is one of the things that help stimulate the country's economy because it increases income for landowners by renting out space for night markets. Including generating income for sellers in the night market. Which may be an advantage of enacting this law. However We often hear that this law favors wealthy people, especially in the area of ​​converting wasteland into agricultural land.

If you look at it from another perspective, converting vacant land into land for agricultural use may help create jobs and careers for the community in which the land is located. Which is beneficial in generating income for people in that area as well. And as this law has only recently come into force, the government will therefore have to review and improve it to be appropriate for the people. As taxpayers, we have a duty to understand the changes in the law regularly so that we can comply with the law correctly and continue to use our legal rights to manage our assets. go

In the first half of 2566, there are 4 important issues related to land and building tax law changes as follows:

1. An increase in the appraised value of land and buildings.

In 2566-2569, there will be a new round where the appraised value of land or new buildings will increase by an average of approximately 8.93% and the price of buildings nationwide will increase by an average of approximately 6.21%, which will start on that date. January 1, 2566. The estimated price will be used as the basis for calculating land and building taxes for those who own land or buildings. Apartment owner and those who possess or make use of land or buildings which are state property. When the assessed price is increased, it will cause citizens and entrepreneurs to pay higher amounts of land and building taxes according to the formula. “Assessed price x tax rate = land and building tax”

2. Extend the period for paying land and building taxes.

Citizens or entrepreneurs who are owners or occupiers on January 1 of any year are responsible for paying land and building taxes for that year. The taxpayer will receive a tax assessment notification form from the local government organization within February of each year. And taxes must be paid by April 30 of that year. (This deadline is set every year under normal terms), but in 2566 it will be received as a special case because the government has issued measures to extend the tax collection period to relieve the tax burden for citizens and entrepreneurs. It will be divided into 2 areas as follows:

2.1 Only in Bangkok area

It is good news for the Bangkok area that the government has issued an announcement for Bangkok. Subject: Extending the deadline for implementing the Land and Buildings Tax Act B.E. 2562, dated April 28, 2566, in order to extend the tax collection period according to Section 2.2 further because Bangkok must verify information. Many are for accuracy because the database and program for collecting land and building taxes have been changed. Bangkok has extended the period for tax collection. Taxpayers will receive a tax assessment notification from the local government organization by June 2566 and must pay taxes by August 2566.

2.2 For all areas except Bangkok

Taxpayers will receive a tax assessment notification from the local government organization within April 2566, which has been postponed from February 2566, and must pay tax by June 2566 instead of paying tax by April 2566.

3. Reducing the calculated tax by percentage. 15 only in year 2566

In addition to extending the period for collecting land and building taxes, The government has also issued measures to reduce taxes in 2566 by taking the normally calculated taxes and reducing taxes by 15 percent for certain types of land and buildings as follows.

4. Changing the use of land for agricultural operations

This year there is good news for those who are interested in converting vacant land into land used for agricultural operations in terms of changing the minimum rate of use for agricultural operations. This is because taxes collected from abandoned land and buildings have a tax ceiling of up to 3.0 percent of the assessed value. But land used for agricultural purposes will have a tax ceiling not exceeding 0.15 percent. If the land owner is an individual, tax will be exempt for land worth not more than 50 million baht per local government organization.

In addition, the government has issued a new law regarding the change in the minimum rate of use in agricultural operations, that is, the announcement of the Ministry of Finance and the Ministry of Interior regarding the criteria for use in agricultural operations (No. 2) has Effective on March 10, 2566, the law reduced the minimum agricultural operation rate per rai for some crops. and added the types of plants that can be grown as follows

• Reduced the minimum rate for Arabica coffee varieties from the original 533 plants per rai to 400 plants per rai.
• Reduced the minimum rate for woody plants from the original 100 plants per rai to 30 plants per rai.
• Add another 7 types of plants that can be planted: mulberries, grapes, dragon fruit, apples, avocados, dates and eucalyptus. The minimum planting rate for all 7 types of plants is set at 35 plants per rai.
• Change the name of passion fruit to passion fruit.
• There are some precautions for those interested in growing strawberries. Because this year the state has removed strawberries from the list of plants that will be considered agricultural uses.

In terms of plant types and minimum planting amounts for other plants, It remains the same as the government passed the law in 2563.

Although the land and building tax law increases the burden or cost of ownership for taxpayers. But if we plan and manage the land well, such as doing a night market or doing a Property Backed Loan (wealth management loan), which is a product for the Bank's Private Banking customers by changing real estate such as vacant land. Land with buildings as an investment by investing such money in financial products through the bank and bank affiliates with the hope that the return will be higher than the financial cost. That land may be another source of income for us and we can use that income to pay land and building taxes.

In addition, taxpayers should regularly follow up on changes in the law in order to plan and manage the payment of land and building taxes in accordance with the law.