Tax review needed before new bill enforced

The new tax, which is expected to be approved by the cabinet in the next few months, will impose an annual tax on property owners with revenues to revert to local administrations.

The association said that in addition to increasing liquidity in the market, scrapping the transfer tax would also encourage more transparency in reporting transaction values as it would eliminate the tendency not to report prices in order to avoid additional taxes. 

Klaew Thongsom, head of the Treasury Department´s property valuation bureau, who believes property-related taxes should be overhauled before the new tax act comes into force, said a reform of income taxes on property transactions should also be explored.

Instead of using valuation prices as a base to calculate income gains, he said the Revenue Department could tax capital gains between the original purchasing price and the final sales price.

According to Klaew, the Treasury Department has completed valuation assessments of just six million plots nationwide, with another 24 million still to go. The valuations are the first step in setting plot values that will be the basis for the new land and building tax.