Government considers extending land and building tax break

The Ministry of Finance is considering extending the postponement of the new Land and Building tax to 2021 after previously waving 90 per cent of tax bills until the end of 2020.

Local media reported last weekend that the Finance Ministry intended to keep up the relief measure to reduce the burden of land and building tax for another year, saying that more details are expected to be concluded within this month. An analyst says this is a slight positive factor for the property sector.

To help people cope with the economic slowdown, the tax relief scheme aims to maintain the same rate of this year of 90 per cent discount as the impact from the spread of coronavirus continues to worsen household’s income, said the ministry.

However, local media also said that the measure is still in process of considering the rate of tax bills discount as the government had to compensate for a big amount of local income.

Napat Vorajanyavong, an analyst at KGI Securities, said that the impact from waiving the new land and building tax through the next year should be slightly positive, as most developers have not held lots of land banks.

Overall property developers should be given a small positive impact from this government’s scheme, added Napat.

The analyst noted that AP Thailand (AP) and Land and Houses (LH) have held relatively higher land banks than others.

“For projects under development, they have already received a 90 per cent tax deduction for 32 year since a development license is granted, so extending the period of time should provide more flexibility to all developers, especially for high-rise developers,” Napat explained.

On Monday trading, AP share price stood at 7.60 baht per share at 11.20 a.m., up 0.66 per cent, with a transaction value of 38.27 million baht.

Meanwhile, LH traded at 8.35 baht per share at 11.21 a.m., down 1.76 per cent, with a transaction value of 140.22 million baht.

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