Property Tax Planning
The Property Tax Act was announced in the Royal Decree to be effective immediately from 1st January 2020 onwards, affecting the new property tax structure change for all types of assets and properties which is different from the old tax structure in the form of local maintenance tax or property tax as before. Overall, the first factor that affects the new property tax is the property appraised value which may not be the current market value but uses the official appraisal base. For your information, it will be the combination of the land price plus the price according to the book value of the buildings and improvements on the land. The factor is land utilization. Please note that the tax will be paid at a higher rate for those unused land or the ceilings will go up higher and higher for those that have been left for a long period of time. Therefore, this shows that the lands that have been abandoned are not considered good. In this case, the landlord will need to hurry and find a way to utilize the land regardless of whether for agriculture or improvement of housing uses. However, it must be well-formatted according to the applicable laws, such as the percentage of space usage and etc. Regarding the long-term management plan, we recommend you to bring the land to study the forms of land use in order to achieve the maximum utilization or ‘Highest and Best Use’ for both, form or land use as well as finding investors to invest in our land. This is called turning the burden into an opportunity in adding more value to the land.