Korakot Attasakulcai, head of the private banking services group at Kasikorn Bank, said that the government's announcement of the abolition of the land tax cut in 2022 after a 90% reduction in the last two years, made landowners worried, especially those who are still waiting for the completion of development.
This is due to the fact that undeveloped land still cannot generate cash flow to pay for tax expenses.
Landowners and those who are going to invest in land should better study market trends and look for opportunities to increase the potential of land in order to generate income that would cover expenses.
Three trends in real estate have been identified that are worth paying attention to this year as a guide for making decisions about investments or land management:
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Changes in the use of space. In the era of COVID-19, the way of life of people has radically changed, work at home is becoming more and more popular. This trend is expected to continue to grow in the future. As a result, fewer people are connected with trips to work in the city. People prefer to live in a house with more space than in an apartment.
Office space will be in less demand. People pay less attention to the location of markets and shopping centers, as they order food and all goods online.
Due to this, land in the city slows down growth, while land outside the city increases in value.
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Strategy change due to changing market conditions. As a result, more properties were sold to the market, at a more tangible price than before. Demand for luxury real estate has increased.
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Before deciding to invest in real estate, do not forget about tax obligations. The land tax is an additional burden after the government canceled a 90% tax cut and it will increase in the future due to the higher estimated land price. The tax rate may increase by 0.3% every 3 years.
Today's real estate investments have many factors that landowners and developers need to keep in mind in order to keep up with the market. Investments in real estate, as well as in other assets, have both profitability and risks, which should be remembered. Investors should carefully study or consult with experts to increase their assets. and not to be in an investment trap.