Building and Land Tax Act B.E. 2562 came into effect on January 1, 2020, in lieu of the House and Building Tax Act B.E. 2475 and the Local Development Tax Act B.E. 2508 That in order to stimulate the use of land and building. It is a good idea to know how the Building Land tax works.
Who is the Taxpayer?
Building and Land Tax refers to the tax levied on building and land continuously used. Whether rent, lease, business and/or providing services i.e. dormitories, schools, banks, hospitals etc. The Building and Land owner is liable for building and land tax when utilizing such Buildings or Land. This means building and land for residency has no liability for paying building and land tax under this Law.
How to make the tax payment and when?
Building and land tax is a local tax payable to the district office or municipality or OrBorTor ‘Local Administrative’ where the building or land is located. The building and land tax is collected on an annual basis.
If the building and land was utilized in the previous year. The taxpayer shall file a tax return from between January to February of each year. For example, the owner renting a home between September to November 2020, in total 3 months, the owner shall file the building and land Tax return within January to February 2021.
Some local authorities provide the taxpayer an option for services that allow the taxpayer to file the tax return by post, or by e-filing, Line or WhatApp application possible. For more information you may contact the local Administrative where your building and/house is located.
Tax Rate and Calculation
The current tax rate is 12.5% per annual fee but the formula for the calculations are different between 2 main types of use. Examples for the calculations are as follows.
If the building/land is rented for resident or dormitory, the formula (Rental per month) x (number of months in use) x (12.5%) = tax payable
For example, In 2020, the rent of 10,000 baht/month for 9 months would be 10,000 x 9 x 12.5% = tax payable 11,250THB.
If the building/land is used for another business, the formula (area in square meter x location rate) x (number of months in use) x (12.5%) = tax payable
The location rate due to the assessment of each local administration which is different between each location.
For example, a 150 square meter office has been operating throughout the year. Let’s say that the location rate at 100 baht per square meter, would be (150 x 100) x (12) x (12.5%) = 22,500 tax payable.
Tax Collection Procedure
There are 5 steps to the tax Collection
Step 1 The local administrative ‘Announcement of appraised value of building and land tax rate and other necessary information.
Step 2 The local administrative ‘Notify tax assessment by sending tax assessment forms to taxpayer’
Step 3 ‘the Taxpayer pays tax’ if the taxpayer is unable to pay the tax in one time. The taxpayers shall pay in installments for 3 installments maximum.
Step 4 if there is the outstanding tax. The local administration will serve a ‘Warning letter to pay taxes to the taxpayer’
Step 5 When a taxpayer has received a warning but the tax is still outstanding. The Local Administrative will notify the Land Department that there is the outstanding tax.
- Failing to submit the Tax return ‘Por Ror Dor 2 form’ within February each year, shall be fined 200 baht. And shall be charged for the building and land tax retrospectively based on the number of years of failing for not more than 10 years.
- Submitting a false Tax return ‘Por Ror Dor 2 form’ to avoid tax, shall be punished with imprisonment for 6 months or up to 500 baht fine or both. And shall be charged for the building and land tax retrospectively based on the number of years of submitting the false tax return for not more than 5 years.
- Late payment more than 30 days from the date of receiving the tax assessment notice (Por.Ror.Dor.8 form) shall be penalty as following rate; Not more than 1 month 2.5% of outstanding tax, over 1 month 5% of tax assessment, over 2 months 7.5% of tax assessment, over 3 months 10% of tax assessment, over 4 months shall be seized the building/land or sell by auction without Court judgment.
Purchasing or investment the real estate such as house, condominium and land the purchaser shall be considered of Building and Land Tax. For more information about Building and Land Tax you may contact the local Administrative where the building and/house is located or if you need help from a Law Firm in Phuket you may contact our real estate lawyers for assistance.