On 12 March 2019, Thailand's Land and Buildings Tax Act BE 2562 was gazetted, putting into effect one of the major tax reforms of the Government, replacing the local governments' house and land development taxes with an Act that taxes the values of land and buildings.

The Thailand local government House and Land Tax and Local Development Tax were not taxes on land and building property values, but instead, were taxes on the income earned from the renting out or the leasing out of property (a form of income tax on rental income). 

The Land and Buildings Tax Act repeals and replaces the provisions in the local government House and Land Tax and Local Development Tax, as follows:

Applicability

From and including 1 January 2020.

Power to Collect the Tax

Local government authorities.

Persons Subject to the Tax

The following owners or possessors of land and/or buildings:

• Natural person (individual) owners or possessors; and
• Juristic person (corporate entity) owners or possessors.

Tax Base

The tax base (the value of land and/or buildings on which the tax is payable) is:

1. The total gross appraised values of all the land and/or buildings owned or possessed in a local government area on 1 January each year;
2. ​​Less a deduction from the total gross appraised values for natural person (individual) owners or possessors of land and/or buildings.

Tax Rates

The Act prescribes the rates of tax payable on the tax base shall be those rates of tax prescribed in Royal Decree laws and notified by local government authorities each year before 1 February.

And for land and buildings that are vacant or not used for any purpose, the Act prescribes that when such land and buildings remain vacant or not used for 3 consecutive years, the rate of tax shall increase for the 4th year and again after each 3 consecutive years thereafter by 0.3% until the rate reaches 3%.

Notice of Tax Assessment

Local government authorities shall compute the amount of tax payable and shall notify the taxpayer the amount of tax payable through a notice of assessment in the month of February each year.

Payment of Tax

The taxpayer shall pay the tax according to the notice of tax assessment within the month of April of each year.

Penalty and Surcharge

Penalties for non-payment and surcharge for late payment apply as follows:

• If a taxpayer does not pay the tax by the specified date in April, a penalty of 40% shall additionally be payable, but if a taxpayer pays before a reminder letter is issued, the penalty shall be reduced to 10%;
• If a taxpayer does not pay the tax by the specified date in April, but pays the tax by the specified date in a reminder letter, the penalty shall be 20%; and
• If a taxpayer does not pay the tax by the specified date in April, a surcharge of 1% for each month or fraction of a month paid late shall also be payable, but if a taxpayer pays late because an extension of time has been granted by a local authority, the surcharge shall be reduced to 0.5% for each month or fraction of a month paid late.

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