Government to undertake study on reforming land and building tax
The Finance Ministry is studying how to reform the land and building tax to lessen the financial burden on the people while the country’s economy has not yet recovered, a senior official said on Wednesday.
Paopoom Rojanasakul, secretary to the finance minister, unveiled the plan during his speech to kick off a seminar on the property market, titled “Property Market Key Index of 2024 Economy”.
Paopoom said the reform was aimed at reducing the impact on people when the country’s economy was still in crisis.
The restructuring of the tax would be for both improving efficiency in collection of land and building tax and finding appropriate tax rates, Paopoom said.
“Land tax collection must be reformed to have more efficiency in rates, appropriateness and range of enforcement,” Paopoom said.
He said the study would be conducted together with the Interior Ministry and the reform should benefit both the private sector and the people.
“This is a sensitive issue. I think the Thai economy is still weak so the people’s grievances should not be aggravated by tax,” Paopoom said.
On the property sector’s call for the central bank to ease its requirement for commercial banks to strictly adhere to the loan-to-value (LTV) ratio when considering loans for home buyers, Paopoom said the Bank of Thailand should not view the easing as creating more household debt.
Instead, Paopoom said, the central bank should regard the easing of the LTV ratio as helping boost the economy.
Paopoom called on commercial banks themselves to ease their criteria for approving loans to home buyers and dare to take risks.
On the government’s measures to help property developers, Paopoom said the government has five tax measures and two financial measures for boosting the property market.
The five tax measures are:
- allow income taxpayers to use the interest amount they pay on home instalments up to 100,000 baht as deduction when they calculate their income tax liability.
- The land and building tax will be reduced by 90% of the tax amount for up to three years for developers whose housing projects are still under construction.
- Land and building tax for central assets or central utility services for condominiums will be exempted.
- The deadline for paying land and building tax for 2024 will be extended by two months.
- The ownership transfer fees for home and condo buyers will be reduced from 2% to 1% and mortgage fees will be reduced from 1% to 0.01% for purchases and transfers made within this year.
He said the Government Housing Bank has two financial measures to help home buyers:
- GHB’s “One Million Homes Project” will allocate a budget of 20 billion baht to provide loans not exceeding 1.5 million baht to home buyers. They will enjoy fixed 3% annual interest rate for the first five years.
- GHB’s “Happy Life” project will allow people to obtain up to 2.5 million baht loans for buying houses. Successful applicants will get to pay the interest at an average rate of no more than 2.98% for the first three years.
