Tag Archives: land law

New Real Estate Right Recognized by Thai Law

Leave a reply

Thai law allows for various legal methods to give “grantees” a right to use real estate, (referred to as “immovable property” under Thai real estate law) as leases, superficies (allowing the grantee to own buildings and other structures on land), usufructs (allowing the grantee the possession of, use of, or enjoyment of the benefits of an owner’s land), and habitation (allowing the grantee to reside on another’s land).

Some of the pitfalls of these rights for a grantee are that they are not easily transferable to third parties and are not readily available as collateral for a loan since the consent of the landlord is normally required. 

A new type of real estate right has been created that may assist in providing more expansive rights to grantees.

The new right is known as a “Sap-Ing-Sith”. In addition to using the underlying property as they would under a normal lease, holders of a Sap-Ing-Sith can also transfer the right to a third party or use it as collateral for a loan without the need to obtain consent from the landlord.

Only land covered by a Chanote (a title deed in Thailand land law), buildings constructed on Chanote, and condos can benefit from a Sap-Ing-Sith.

A Sap-Ing-Sith is created by an agreement by the landlord and grantee in writing. The period of a Sap-Ing-Sith can last up to 30 years and must be registered with a Thailand land office, which will in turn issue a Sap-Ing-Sith certificate.

Thai Government Passes New Land and Building Tax Act

Leave a reply

Recently, the National Legislative Assembly passed the Land and Building Tax Act.

The new law will replace both the House and Land Tax and the Local Development Tax when it takes effect on January 1, 2020.

The bill alters land and building tax laws in Thailand by placing property into four distinct legal categories: agricultural, residential, commercial, and vacant.

Each property type has its own tax rates based on the appraisal value.

For agricultural use, there are five tax rates:

  1. 0.01% for land valued between 1 million and 75 million baht;
  2. 0.03% for land valued between 76 million and 100 million baht;
  3. 0.05% for land valued between 101 million and 500 million baht;
  4. 0.07% for land valued between 501 million and 1 billion baht; and
  5. 0.1% for land valued at more than 1 billion baht.

Agricultural land worth less than 50 billion is exempt from taxes if it is owned by a sole individual.

For residential use, there are four tax brackets:

  1. 0.02% for land valued between 1 million and 50 million baht;
  2. 0.03% for land valued between 51 million and 75 million baht;
  3. 0.05% for land valued between 76 million and 100 million baht; and
  4. 0.1% for land valued more than 100 million baht.

For first-time home-owners, a tax-exemption of up to 50 million baht is available.

For commercial use, there are five tax rates:

  1. 0.3% for land valued between 1 million and 50 million baht;
  2. 0.4% for land valued between 51 million and 200 million baht;
  3. 0.5% for land valued between 201 million and 1 billion baht;
  4. 0.6% for land valued between 1 billion and 5 billion baht; and
  5. 0.7% for land valued at more than 5 billion baht.

For vacant or unused property, there are five tax applicable rates:

  1. 0.3% for land valued between 1 million and 50 million baht;
  2. 0.4% for land valued between 51 million and 200 million baht;
  3. 0.5% for land valued between 201 million and 1 billion baht;
  4. 0.6% for land valued between 1 billion and 5 billion baht; and
  5. 0.7% for land valued at more than 5 billion baht.

The tax rate on vacant lands and buildings will increase by 0.3% each year but will not exceed 3%.