There is a strong rumour in the property sector in Thailand that the new government has approved legislation to reduce the taxes relating to the property tax you have to pay at the land office. There were reports that business tax would be reduced from 3.3% to 0.011% and transfer tax would be reduced from 2% to 0.011%. I have researched this quite thoroughly, as this would make a significant impact on the property market, and if true, those buying or selling property right now would want to postpone the date and wait for this new legislation to take effect. My Thai partner helped me with the research and contacted 2 land offices and a couple of government departments who all quite categorically stated no new legislation had been passed. I also contacted various people associated with the property business and whilst many actually thought the legislation was going to happen or indeed had already happened, none could give me a definitive source for their information. It appears this "rumour" has spread like wildfire, but not without reason. Here is the report that I believe may have fuelled the rumour most:
http://enews.mcot.net/view.php?id=3262
And here is another
http://www.prakard.com/default.aspx?g=posts&t=35493
New legislation however has actually been passed to reduce the amount of shareholders required for a Thai ltd company from 7 to only 3, so that is excellent news for anyone having to manage a Thai Shell company. The amendment was published in the Government Gazette on March 3, 2008 and will be effective on July 1, 2008
While discussing this with others, some were stating stuff like "they are going to raise the lease limit from 30 years to 90 years" and "the 49% foreign ownership rule will be increased to 80%" I suspect this is just wishful thinking perpetuated by optimists and those wishing to stimulate the market, however, there does seem to be indications from this new government they will be more sympathetic for foreigners wishing to own property, allbeit the evidence is difficult to come by and is not as clear cut as some claim.
If anyone has more information regarding this I would be very grateful for their input and knowledge. In summary my research has pointed to the fact the reduction of property land tax which many say is going to happen next month is only a rumour, but I would love it if someone were able to show this is not the case.
Reducing taxes relating to property tax is only rumour
This in Saturdays Bangkok Post.
http://www.bangkokpost.net/Business/29Mar2008_biz28.php
PROPERTY
Tax breaks become official today
Tax breaks for property buyers will become effective today with the official publication in the Royal Gazette, according to Suparut Kawatkul, the Finance Ministry's permanent secretary. Three laws would become effective, with the first reducing specific business taxes for property operators to 0.1% from 3% for transactions occurring over the next year.
The second law will increase waivers for individual taxpayers to the first 150,000 baht in income from 100,000 baht now, effective for the 2008 tax year. The increase will effectively reduce withholding taxes for individuals immediately.
The third law affects tax calculations for small companies with paid-up capital of less than five million baht, with the first 150,000 baht in income waived from corporate taxes. Profits after the first 150,000 will be charged under the normal ladder scale at rates from 15% to 30%.
The Interior Ministry has also announced that land transfer and registration fees will be cut to 0.01%, effective today.
The measures are part of a 40-billion-baht economic stimulus programme announced earlier this month by the government.
http://www.bangkokpost.net/Business/29Mar2008_biz28.php
PROPERTY
Tax breaks become official today
Tax breaks for property buyers will become effective today with the official publication in the Royal Gazette, according to Suparut Kawatkul, the Finance Ministry's permanent secretary. Three laws would become effective, with the first reducing specific business taxes for property operators to 0.1% from 3% for transactions occurring over the next year.
The second law will increase waivers for individual taxpayers to the first 150,000 baht in income from 100,000 baht now, effective for the 2008 tax year. The increase will effectively reduce withholding taxes for individuals immediately.
The third law affects tax calculations for small companies with paid-up capital of less than five million baht, with the first 150,000 baht in income waived from corporate taxes. Profits after the first 150,000 will be charged under the normal ladder scale at rates from 15% to 30%.
The Interior Ministry has also announced that land transfer and registration fees will be cut to 0.01%, effective today.
The measures are part of a 40-billion-baht economic stimulus programme announced earlier this month by the government.
May you be in heaven half an hour before the devil know`s you`re dead!
Thank you Nereus, this is very good news for the property market. I have found the whole communication process regarding this topic very interesting, in that many people seemed to have known a bout it before it was officially announced. I've still to read the offical statement from the Thai Government Gazette, but assuming the report from the Bangkok post is true. this measure sends a very positive and welcome measure to those selling and buyinf proprty/