![An overview photo shows the construction of the SRT's Red Line (Bang Sue-Rangsit) is under way. The new land development tax, a levy on real estate whose value has increased because of infrastructure development, would give the government an additional revenue source. PATTARAPONG CHATPATTARASILL](https://static.bangkokpost.com/media/content/dcx/2016/09/05/1967696.jpg)
The land development tax would be a one-off levy imposed on owners selling or transferring real estate whose value has been boosted by nearby infrastructure projects, a source at the Finance Ministry says.
The tax will not be implemented retroactively, so land along infrastructure projects that are completed before the tax comes into effect will not be subject to it, the source added.
Property owners will only have to pay the tax when the real estate is sold or changes hands, the source said, adding that the levy could be imposed on the difference between the Treasury Department's appraisal prices before and after the construction of such projects.
For instance, if a property's appraisal price stood at 1 million baht prior to the construction of a project and the price shot up to 5 million after construction, the owner(s) would be subject to a levy on the additional 4 million baht in value when the property is sold or transferred.
The land development tax, commonly known as a betterment tax, is part of the Finance Ministry's efforts to seek new sources of tax revenue to boost the government's coffers and diversify its tax structure, which now relies heavily on income tax and value-added tax. Apart from the land development tax, other taxes on assets that have been pushed by the current government include an inheritance tax, a gift tax and the land and buildings tax.
The source said Finance Minister Apisak Tantivorawong has urged the Fiscal Policy Office (FPO) to speed up drafting of the land development tax to accommodate the government's eight-year large-scale infrastructure development plan.
The FPO is currently studying betterment taxes that have been implemented abroad, the source said, adding that the tax has been temporarily applied in some countries, while it was made permanent in others.
Thailand could choose to tax real estate whose price has been inflated from infrastructure development only once, meaning the property would not be subject to the tax again if it is sold or transferred in the future, the source said.
The source further said that not everyone who owns real estate near infrastructure projects would have to pay the tax, as the draft bill would set a radius determining who is liable. Those who own land outside the set distance would be free from the tax, even though their property prices would get a boost from the infrastructure development, the source said.