Land appraisals likely to be ready for new property tax

The department has already assessed about 8 million plots and another 4 million are slated to be assessed before the end of this year, according to the Finance Ministry.
“The remaining 20 million plots are in blocks, and these will be appraised before the end of 2016. The fully completed assessment with comprehensive details will be available in 2017,” said Deputy Finance Minister Wisut Srisuphan after the opening of the Treasury Department’s annual exhibition at Queen Sirikit National Convention Centre yesterday.
“As far as I have been informed, the prices of land in the countryside have increased by around 30-31 per cent on average, while in Bangkok and other areas [prices] in general have increased by 15 per cent on average,” he said. In some areas near mass-transit rail routes, prices have increased by 70 per cent or more, he noted.
The Treasury Department conducts land appraisals every four years, so the percentage increases provided were in comparison to the appraisals four years ago, Wisut explained.
If the government can implement the new land and buildings tax by 2017 as planned, the new appraisals should be ready to be used as the tax valuation base. “Currently there is no new appraisal for land prices within the [planned] special economic zones, since we have to wait and see what kind of developments are going to be there when supporting businesses are set up. But their prices will obviously increase,” he said.
Wisut also said the ministry had yet to receive the result of findings from the Revenue Department that would show how much people earning a salary are investing in long-term equity funds for long-term savings.
The findings are meant to help the ministry determine whether the tax privilege for LTFs will be renewed, as it is due to expire at the end of 2016.
There is a possibility the lock-up period for investing in LTFs could be longer than the current five years, up to seven or even 10 years, if the tax privilege is extended, as suggested last month by Prasong Poontaneat, director-general of Treasury Department.
“I have yet to see the findings and there will probably be some more changes to the privilege before it expires,” Wisut said. “I cannot confirm right now that it will be extended as we will have to wait for the ministry’s policy, but anything could happen during such a turbulent time that requires a stabiliser in the capital market. “People who are against the extension say that the policy only serves the fortunate, while people who are in the middle say that some privileges could be reduced or combined. The ministry’s position right now is to reassess the pros and cons before we make a decision,” he said. Veerasak Supakatitham, chief operating officer of the operating division at Asset Plus Fund Management, said the LTFs should be extended to encourage more people to save, as the more money was in long-term funds the more stable the country’s financial markets would be.
“The number of mutual funds in a developed country is normally more than 100 per cent of its gross domestic product, but the total number of mutual funds in Thailand could only amount to around 25 per cent of GDP,” Veerasak said.
“So there is much more room to grow here, and the cancellation of the LTF tax privilege would tarnish the potential of this expansion, which could help stabilise the country’s financial markets during such a turbulent time in the world’s money markets.”