Tax reform must precede liberalisation
Bangkok Post, Published: 17/02/2010 at 12:00 AM
Newspaper section: Business
The government should put in place tax measures including
the land and building tax and inheritance tax before liberalising foreign land
ownership in Thailand, suggests Sopon Pornchokchai, chairman of the consultancy
firm Agency for Real Estate Affairs (AREA).
"If these two types of tax are not implemented, it means that the state will
get nothing when land is sold to foreigners," he said.
Dr Sopon said that when a Thai citizen buys a house in the United States, the
transaction would face land and property tax at around 1-2% of the value. When
this person wants to transfer the property to an heir, the inheritance tax will
be 20-45% of the value.
Thought some US states may not apply this system, they use a capital gains
tax based on the difference between the purchasing and selling prices.
He said that if foreigners buying land in Thailand did not face similar
taxes, it would disadvantage te country.
"AREA views that the government should implement the tax measures first
because the lack of such taxes would bring huge losses to Thailand. The system
here is completely different from what exists when Thais buy houses in Europe or
the US," said Dr Sopon.
The agency also suggests the government improve other facilities such as
databases on foreigners, and inspections to detect legal breaches related to
land holdings in Thailand, and continuous examination of residency and