Finally! We’ve been waiting on this for years, land lords in Thailand have enjoyed owning tremendous amounts of land for generations without any taxes spent on it whatsoever. While the annual tax %-age is low @ 0.5% to a max of 2% of land value when compared to what I see in Europe and the US, the thinking of landowners will change and I envision that the landscape of Thailand will look drastically different within the next 10 years because of this.
The draft bill, which was first proposed when the Democrat Party was in power, calls for penalty tax rates to be assessed on unused land to deter speculators. The rates would start at 0.5 per cent of the value of land and buildings in the first year and double every three years to a maximum rate of 2 per cent. That maximum may not be high enough to deter land speculation, Somchai said.
Source: The Nation
Now I’ve heard the argument that “oh land tax is unfair and those that don’t have money will be forced to sell their lands and that businesses will take advantage of this fact”
I’d like to argue the following instead, I think taxes on unused land is far more efficient than taxes on income tax because property wealth is far more concentrated than income when it comes to wealth-inequality in Thailand or any other country for that matter. With this tax, over time, I can see things being more fairer and if only this government would finally reduce personal income taxes then this country may become even more enterprising, the only downside? yes the entitled may be slightly less comfortable.
Oh and last point equity market related, yes this should be positive for property developers.