Land Tax

[FrazeeDK]

http://www.bangkokpost.com/opinion/opin ... orthy-goal

http://www.bangkokpost.com/life/financi ... w-land-tax

As any of you with TW/TG and land holdings know, the current property taxes are very very low for the comparitive worth of land/houses. If this bill gets passed by Parliament, then beware the Tax Assessors!! Whoever in the Land Office gets the assessor jobs will end up being richer than a Customs Agent.. Assessing the value versus perceived worth of property can be very subjective.. I figure our place is probably worth 3-5 million Baht.. That doesn't mean we could sell it for that... IF and when the assessor visits, will the fact that the property is "associated" with a Farang cause the assessment to go up??? Per the article "The maximum land tax rate would be 0.5% of the value as appraised by the Treasury Department during the initial stage." If the assessor were to value our propety at the high end, that would mean an annual tax of roughly 20,000 Baht.. Not a killer total but getting close to U.S. property tax...

And of course, the fear would be that for those of us with TW's that went with them to the Land Office and signed the "not my money, not my land" document, is the Chanote flagged in the Land database as "associated" with a Farang..???

The supposed intent of the bill is to tax "unused" land to force land speculators to sell it for more productive use instead of sitting on it.. We'll see what happens..

[nkstan]

I think the law is a valid and needed one,but as with all the other laws of a endemic corrupt society,not of maximum value to the people as a whole.

There is no doubt that falangs will always be scapegoated and taken advantage of in this type of system,!So,yes,plan on paying the surcharges,after all,YOU ARE RICH and it is relatively small in comparison to the West

We should not expect anything to go our way and when it does,accept it as an individual gift or a mistake,because that is exactly what it is!

[parrot]

This being Thailand, anything is possible (as in juntas, coups, mass exodus, or happy-days-are-here-again, or even 50/$1). But back on topic, here are a few pertinent extracts from the article that I read:


Finance Minister Korn Chatikavanij said the exact tax rates under the law had not yet been set.

The maximum land tax rate would be 0.5% of the value as appraised by the Treasury Department during the initial stage.

The initial draft bill sets ceilings on the tax rates for three types of land: farmland (not over 0.05%), residential land (not over 0.1%), and others, including commercial shop houses and unused land (not over 0.5%), according to a source at the ministry. (The way I read this.....most folks would be looking at 0.1% vs. 0.5%)

The process to enact the new taxes is expected to take about four years - two years to pass through parliament and two years for the grace period to expire, Mr Korn said. (given the state of affairs in the government today, does the existing parliament accomplish anything?)

I'd not worry about different taxes for falangs, not much in the way of precedence for this: I pay 20 baht a month for garbage, like all the villagers. My water and electric rates are the same as others (although I pay zillions more because I use ac), auto registration/license/insurance all the same. More than anything......4 years from now in Thai politics is a lifetime..........I'm just wondering what's going to happen in the next 2 weeks.

[Bandung_Dero]

Glad we only built a humble looking Thai styled home so shouldn't pay any more than our neibours. Don't know about other Western countries but in Australia annual land taxes (rates) on single dwelling properties are assessed on the land value only not the value of the building. This statement reads the same to me

residential land

. Going on recent sales in the village our land value is about 120,000 Baht so I guess our tax rate would be 120 Baht, affordable even for the Thais.

[gulfman]

We have just purchased 5 Rai of farmland near Udon, but yesterday when my wife went to the Land Registry to sign the transfer papers she was told that because she is married to a ‘falang’ she must pay tax at 8% (I believe the normal rate is 5%), and also that I too must sign the transfer with her.

I think that I have seen this precise thread on Udon Map, but can’t find it. Can anyone assist/advise/explain?

[fremmel]

The transfer fee for land is 2% unless it's been held for less than 5 years, in which case there's another 3.3% added. Here's a link to the land office page with the transfer costs. It's in Thai but Google Translate does a reasonable job of translating it to English. Your wife can probably do a better job.

There's nothing in there about a "farang" tax but each land office seems to have their own set of rules that may or may not conform to national law.

[Texpat]

I have been told there is no tax on residential land (under a specific size -- I think it's five rai) if you live baan nawk.
Despite asking neighbors repeatedly, I've not paid any tax while living in my house for three years, they always say there is none due.
Hell, it's not my land anyway,tax/penalize my wife -- not me.

My brother-in-law works at the local land office and has never mentioned us owing any property tax.

[FrazeeDK]

as you can see from the previous postings, the land tax issue has been kicking around for years.. The rates don't appear too bad BUT!!! the question about it all lies in how the Treasury Department is doing the actual value assessments.. Nobody seems to know.. If they were to assess at Udon's current "asking prices" for land and houses the tax could be a heavy burden... I really can't see that happening as it would crush your average middle class Thai land/homeowner completely.. There's no way they could afford 50/80/100K Baht a year in potential taxes if their residential properties are assessed at millions of baht in values.. http://www.bangkokpost.com/business/new ... l-softened

[747man]

I think the law is a valid and needed one,but as with all the other laws of a endemic corrupt society,not of maximum value to the people as a whole.

There is no doubt that falangs will always be scapegoated and taken advantage of in this type of system,!So,yes,plan on paying the surcharges,after all,YOU ARE RICH and it is relatively small in comparison to the West

We should not expect anything to go our way and when it does,accept it as an individual gift or a mistake,because that is exactly what it is!

It's O.K For you Stan.....You're only RENTING !!!

[old-timer]

I think the law is a valid and needed one,but as with all the other laws of a endemic corrupt society,not of maximum value to the people as a whole.

There is no doubt that falangs will always be scapegoated and taken advantage of in this type of system,!So,yes,plan on paying the surcharges,after all,YOU ARE RICH and it is relatively small in comparison to the West

We should not expect anything to go our way and when it does,accept it as an individual gift or a mistake,because that is exactly what it is!

It's O.K For you Stan.....You're only RENTING !!!

747man, you do realize that the post from nkstan you are talking about is from 5 years ago. --------
He was advertising land for sale beside the Mekong some time ago if I remember it right.

OT......................

[Brian Davis]

Hmmmmm, IF it is somehow a case of more tax because a farang is in the mix,interesting to see how that might be interpreted.
Would it only be if you're offically married, if your partner has changed her name, if you're resident here most of the time, if it was obvious that the farang had funded the land and/or house? Could possession of a yellow book actually work against you? What about those farangs who only holiday here a month or two every year?
Does seem there might be a case of being had both ways? Not allowed to own property/houses(my understanding, except condos), but the price goes up if we've had some input into a property owned by a Thai!

[kubotatim]

Still be far far cheaper than ripp off UK in my experience, my rental properties are over 75000 baht a year and they are only small 2 bedroomed terraced houses, and my last 4 bedroomed mansion was over 250000 baht equivalent 6 years ago. I do not mind paying as long as the roads, lighting and refuse collection is improved.

[bumper]

We have just purchased 5 Rai of farmland near Udon, but yesterday when my wife went to the Land Registry to sign the transfer papers she was told that because she is married to a ‘falang’ she must pay tax at 8% (I believe the normal rate is 5%), and also that I too must sign the transfer with her.

I think that I have seen this precise thread on Udon Map, but can’t find it. Can anyone assist/advise/explain?

Gulfman do you speak Thai?

Did anyone other then your wife tell you this?

Are you sure you understand what you were told?

My wife and I have been together for 12 year we misunderstand each other all the time, She has been known to B.S. me when money is involved.

Gulfman I don't know your wife, But, I do know mine

The yellow house book has nothing to do with owning anything it merely sates you live at a location. Renters can get them,

[Brian Davis]

I second your comments to Gulfman, Bumper. I'd be against accepting any transaction like this at face value and do all I could to check it was accurate.

Occasional complete misunderstandings with my TW, but more likely difficulty in getting a complete, accurate picture of what's going on. Pleased to say I don't think she'd deceive me over money.

I wasn't suggesting the yellow book proved ownership. Just that, as other posters suggested, it shows a farang 'association' with that particular property.

[Khun Paul]

Just a brief input, as I have a 30 year lease from my ex-wife ( who by thge way is in America remarried ) , I was informed by my friendly accountant that this land tax will have to be paid by her, as she is the owner NOT me. We cannot be made to pay for something we legally here cannot own. How they get the money from her is NOT my problem but theirs.

[merchant seaman]

No wonder you bash Yanks all the time.

[Brian Davis]

....We cannot be made to pay for something we legally here cannot own.

Sort of the point I was trying to make in my first post. Of course, how officials at different Land Offices choose to interpret the guidance or see an opportunity to fill their pockets, will be issues. Some uninformed or unconcerned farangs will pay up to 'keep the peace'.

[Khun Paul]

Quote : Some uninformed or unconcerned farangs will pay up to 'keep the peace'.'


Let us be brutally honest. A Foreigner CANNOT by law own land.
Therefore a foreigner CANNOT pay a tax on something he/she does not own !

The law here is quite specific, the LANDOWNER pays the tax, not renter,not lease-holder.

[Brian Davis]

Yes, Paul, in your situation(lease), it's not the renter or lease-holder who has to pay.
I'm thinking of the (common?) case where the TW's name is on the chanote or other land document.
So the Land Office will be pressing her for payment and the fee MAY rise 'unofficially' if there's knowledge of a farang about.
But who, albeit indirectly, is really going to fork out the money? My TW doesn't work, have her own income, as such.
Those farangs who are not 'informed' may find they're paying over the top.
And knowing how many Thai do just accept what Authority tells them and corruption, money is paid so as not to rock the boat.
How many farangs have been told by partners, "It's Thailand, don't make a fuss, just pay". Certainly happens at Immigration.

[Khun Paul]

That is so true Brian, BUT and it is a big BUT, most foreigners know that legally they cannot OWN land , the house yes, but land no, so the problem will come when the land a mere 100 TW is owned by a lady, but the house is owned by the foreigner. As the land tax reflects the value of land AND house. then it is pretty clear that many foreigners will have to stump up the cost of this tax as they legally own the house on land which is not theirs of course.

This will ultimately redefine the situation regarding ownership of land and houses from a foreigners perspective, which in reality means that lease-holding is the way forward and would ensure some stability of relationship, as even if the lady leaves foreigner who is on the lease for 30 years, said lady will still be responsible for land tax and she has no foreigner to pay same. So legal documents will come into play and foreigners will find themselves being even more corralled as it were relating to house and ownership and leases and and and. the list could be endless.

Interesting times ahead I fear, it is a watch this space i think and see what happens.