DOUBLE VISION New Phuket Land Tax Increase Hoopla
In a process which is undertaken on a cyclical basis,every four years the actual increase is on MAV(minimum assessed value.
minimum assessed values (MAV), not land tax. This is done by Thailand's Treasury Department.
The MAV forms the basis of computing the transfer fee (2%) when land or property is transacted.
Unlike many other countries capital gains is not paid on land transactions but is essentially a transaction tax which includes the 2%, specific business tax 3.3% of the declared value and 1% withholding of the sales price which can be credited back as a tax credit.
Minimum assessed values for land in Thailand are notoriously low and tax exposure on sale comes down to single digits which by international standards is extremely low.
Another practical side is the often practiced under declaration of the declared value of the land which is illegal but often occurs when the two parties wish to minimized tax. This can come back to bite the purchaser though if they wish to list the full asset in their company books and are unable to do so if an wrong declared value is made.
So in a nutshell this is mostly a case of much ado about nothing, and not such big news after all.