Implementation of the New Land and Building Tax Law in Thailand

At the beginning of 2020, Thailand introduced a new tax regime, the Land and Building Tax Law B.E. 2562, replacing the old House and Land Tax B.E. 2475 of 1932. While this law came into effect on March 13, 2019, payments were not due until January 1, 2020.

The primary purpose of this new legislation is to modernize the tax system, encourage more efficient land use, and achieve more effective tax collection. Additionally, it aims to increase public revenue and reduce income disparities.

In addition to replacing old laws, Thailand’s Land and Building Tax Law unifies and consolidates the previous tax framework, including provisions such as the Land Development Tax B.E. 2508 (1965), Executive Council Notification No. 156 BE 2515 (1972), and the Royal Decree Designating the Average Land Price for Land Development Tax Assessment B.E. 2529 (1986).

This tax applies to individuals and companies that own land, buildings, or rights over them, including condominium units.

Lands encompass not only plots but also hills and waterways, while buildings include residential houses, floating houses, or other habitable structures, as well as industrial and commercial storage units.

The tax is settled annually at the local district office, with a due date in April each year. Its calculation is based on the officially assessed value set by the government.

A notable feature of this new regime is its progressive nature, calculated based on the property’s usage, as opposed to the previous flat rate of 12.5%.

It’s worth noting that this law also affects residential properties that were previously exempt from taxes.

However, exemptions exist for certain cases, such as first-time buyers of homes and land valued at less than 50 million baht, with the owner registered in the housing register, as well as for homeowners of properties valued at less than 10 million baht registered in the same register.