Developers warn 2027 land revaluation could deepen Thai property slump

Thailand’s fragile property market faces a fresh cost shock as developers urge the government to delay the new official land appraisal values scheduled for 2027, warning that higher valuations could push up taxes and transfer fees even if tax rates remain unchanged.

The new appraisal cycle, due to take effect from January 1, 2027, and run through 2030, is intended to bring official land values closer to current market prices. It will replace the 2023-2026 cycle, which came into force on January 1, 2023.

But the private sector says the timing could add pressure to an already weak property market, where purchasing power remains fragile and the broader economic recovery has been slower than expected.

Official land appraisal values are used as a key base for calculating several property-related costs, including ownership transfer fees, personal and corporate income tax, specific business tax, and the land and buildings tax. As a result, an increase in appraisal values could raise the amount payable by homebuyers, landowners and businesses, even without any change to headline tax rates.

Higher Tax Base Seen as Indirect Cost Increase

Prasert Taedullayasatit, Chief Executive Officer of Real Estate Business at Ananda Development Public Company Limited and Honorary President of the Thai Condominium Association, said the planned 2027 adjustment is a major concern for the property sector.

He said higher appraisal values would effectively increase the tax and fee burden on the public and businesses at a time when the economy and the real estate market have not fully recovered.

“We understand that the Ministry of Finance wants to increase government revenue, but adjusting the appraisal baseline right now acts like an indirect tax that many citizens might not notice immediately, because the appraisal price determines multiple types of tax burdens,” Prasert said.

According to Prasert, nationwide official land appraisal values are expected to rise by an average of around 10% to 20%. Even if the land and buildings tax rate remains unchanged, the actual amount payable would rise because the calculation base would be higher.

For example, commercial properties subject to the land and buildings tax would face a higher tax bill if appraisal values increase, even if the tax rate itself remains the same.

Property Sector Warns Timing Is Wrong

The warning comes as Thailand’s property sector continues to struggle with weak purchasing power, cautious lending conditions and a large volume of unsold housing stock.

Developers argue that raising appraisal values during a fragile market recovery could further dampen demand, increase holding costs and discourage home transfers. The sector has already been relying heavily on promotional campaigns, including “free transfer” offers, to stimulate purchases and ease buyers’ upfront costs.

Prasert said the government should consider delaying the new appraisal values until the economy and property market are in a stronger position.

He added that the move would run counter to earlier private-sector proposals calling for relief measures, including a 50% cut in the land and buildings tax to help cushion the impact of the economic slowdown.

“The private sector, via the Joint Standing Committee on Commerce, Industry and Banking and the Thai Chamber of Commerce, previously proposed that the government cut the land and buildings tax by 50% to mitigate the impacts of the economic slowdown. Instead, the land appraisal baseline is being raised, causing the tax burden to increase in direct opposition to the business sector’s proposals,” he said.

Developers’ Land Banks and Unsold Stock Under Pressure

The increase would not only affect homebuyers. Developers with large inventories and land banks are also expected to face higher costs.

The real estate sector is currently carrying more than 1.3 trillion baht worth of housing stock awaiting transfer. When accumulated land banks are included, the total value is estimated at about 2 trillion baht.

Higher official appraisal values would increase the holding costs and tax burden on these assets, particularly for developers that have accumulated land for future projects or are still waiting to clear unsold houses and condominiums.

The private sector says this could weaken developers’ financial flexibility at a time when sales remain slow and buyers are facing tighter affordability conditions.

Wider Impact Beyond Real Estate

The planned revaluation is also expected to affect other land-intensive industries, including hotels, retail businesses, industrial factories and agriculture.

Because land is a major operating asset for these sectors, higher appraisal values could raise recurring tax expenses and affect business costs across the broader economy.

Farmers who use land as a core production asset may also feel the impact, depending on how the revised appraisal values translate into tax obligations.

Prasert said the issue should not be viewed solely as a real estate concern, as land appraisal values are linked to many areas of household and business expenses, from home purchases and ownership transfers to land holdings and tax payments.

Second-Home Buyers Face Added Burden

Individual buyers could also be hit by higher transaction costs when transferring ownership of homes and condominiums.

The impact could be particularly clear for buyers of second homes or second condominium units, who are subject to land and buildings tax from the first baht of taxable value.

If appraisal values rise, these buyers could face higher annual tax obligations as well as higher transfer-related costs. Developers warn this could make some buyers delay transfers, especially if existing property fee reduction measures are not extended after they expire on June 30.

The industry is concerned that the combined burden of higher appraisal values, weaker purchasing power and the possible expiry of fee relief measures could further slow residential transactions.

Private Sector Calls for Delay or Relief Measures

Prasert said the government should review the broader economic impact before proceeding with the 2027 appraisal adjustment.

If the new values are implemented as scheduled, he said the government should introduce parallel relief measures to reduce the burden on homebuyers, landowners and businesses.

The private sector argues that while updating official appraisal values may help increase government revenue in the long term, moving ahead during a property downturn could worsen the slowdown and weaken confidence across related industries.

For now, developers are urging policymakers to treat the planned revaluation as more than a routine administrative update, warning that it could become a significant cost shock for a market still struggling to recover.