While property owners continue to familiarise themselves with the new land and buildings tax passed by the Thai cabinet, some feel these will have a short-term negative impact when they take effect next year. However, Suphin Mechuchep, managing director of JLL, pointed out that the new taxes should promote a more efficient use of land and will actually benefit Thailand’s property sector.
For example, some landowners will be forced to make better use of property currently vacant if they wish to avoid paying taxes at a higher rate. Others will likely sell off surplus property in order to avoid additional taxes.
JLL added that property owners who are forced to sell their land because of the new taxes are likely to adopt a flexible pricing strategy in order to speed up the sales process. This includes possibly reducing asking prices. On the other hand, owners backed by significant capital are unlikely to lower their price expectations, especially if the property is in a prime location.