Finance Minister Apisak Tantivorawong (inset) says passing a new land and buildings tax is no longer a priority issue. (Bangkok Post grapics)

The land and buildings tax is not the government's top priority as it launches and seeks measures to stimulate spending and ramp up the economic recovery.

"It [the tax] is not an urgent issue that needs to be pushed at the moment," Finance Minister Apisak Tantivorawong said.

He said the study on the proposed tax had not been finalised by the Fiscal Policy Office, and the FPO had not proposed anything about the tax to him.

"I had never heard before that homes priced at 2 million baht will be taxed at 600 baht a year and those priced at 100 million will be levied at 60,000 baht a year, as news reports [have suggested]. I don't know who leaked the news or if it is the source's own imagination," Mr Apisak said.

Local media have reported the FPO has set the ceiling rates for the tax at 0.2% of appraisal value for land used for agriculture, 0.3% for residences and 1% for land for commercial use.

Undeveloped land would be taxed at 1% for the first three years before doubling to 2% for the next three years and hitting the 3% ceiling in the seventh year.

However, the actual tax rate would be levied at progressive rates, according to reports. Agricultural land would be charged at 0.01% if the appraised price is no more than 2 million baht or up to 200 baht a year, while land worth more than 100 million would be taxed at 0.1%.

Apisak: New tax not being pushed

Residences appraised at no more than 2 million baht would be taxed at 0.03% or up to 600 baht a year, while homes priced more than 100 million would be charged at 0.2%.

Commercial land would be taxed at 0.1% or up to 2,000 baht a year if the appraisal value was less than 2 million baht and at 0.6% for land valued at more than 1 billion.

These rates would require Mr Apisak's approval.  

Previous finance minister Sommai Phasee tried to push the land and buildings tax to alleviate the government's fiscal burden in subsidising local administrative organisations.

The tax, if it comes into force, will replace the local development tax and house and land tax, which have been criticised as regressive since they are based on outdated appraisal prices and have many waivers.

The local development tax and house and land tax are now collected by local administrative organisations.

The new tax was expected come into effect in 2017.

In March, Prime Minister Prayut Chan-o-cha decided to shelve the bill for the new tax after growing public opposition.

He asked the Finance Ministry to seek ways to reduce the burden on low-income earners even though the ministry had watered down the bill by halving the ceiling tax rate, providing tax allowances, offering a grace period for tax payment and allowing depreciation deductions.  

After Mr Apisak took office in late August, he said the land and buildings tax had not been scrapped and was under study for improvements.

He said details would become clearer by year-end but was uncertain when tax rates would be completed.

A source said the tax's progressive rates were aimed at avoiding strong opposition and fostering fairness, as people who owned expensive properties would be subject to bigger tax bills.