Reduction in tax on land and buildings

As part of the Thai government’s efforts to reduce the tax burden and to support economic recovery, Royal Decree on the Reduction in Tax on Certain Types of Land and Buildings (No. 3), 2566 B.E. (2023) (“the Royal Decree”) was published in the Government Gazette on 19 March 2023 and became effective on 20 March 2023.

Keywords: Mazars, Thailand, Tax, Land, Building

8 May 2023

The Royal Decree states that tax on the following types of land and buildings will be reduced by 15% for the 2023 calendar year:

1. Land or buildings used for agricultural purposes;

2. Land or buildings used for residential purposes;

3. Land or buildings used for certain purposes other than those set out in items 1 and 2; and

4. Vacant or unused land or buildings.

Therefore, the owners of such land or buildings will pay 85% of the net amount of tax on land and buildings.

In addition to this most recent reduction, owners of types of land and buildings* that were eligible for a 50% reduction in tax under the previous Royal Decree on reducing tax issued in 2020 can claim this additional 15% reduction. Therefore, such property owners will pay 42.5% of tax due for 2023.

However, owners of certain types of land and buildings (refer to the sources below for more detail) that were eligible for a 90% reduction in tax under the previous Royal Decree on reducing tax can continue to utilize this reduction but are not entitled to the 15% reduction in tax under the most recent Royal Decree.

The table below gives examples of types of land and buildings which are eligible for a reduction in tax under the applicable Royal Decrees and the tax rates after the reduction:

Examples of certain types of land and buildings	Rate of reduction in tax under the previous Royal Decree issued in 2020	Rate of reduction in tax under the most recent Royal Decree	Net tax rate in 2023
Land or buildings used for: - agricultural purposes; - residential purposes; - certain other purposes; and - vacant or unused land or buildings.	-	15%	85%
The types of land or buildings mentioned above, including land on which an electricity-generating dam is located	50%	57.5%	42.5%
The types of land or buildings mentioned above, including land allocated for the development of housing projects.	90%	-	10%