0.1 percent tax on the taxable value of land and building

Thukten Zangpo 

Following lengthy deliberations on the exemptions and concessions on land and building taxes, National Assembly yesterday adopted the Property Tax Bill of Bhutan 2022 with 42 Yes votes.  Three of the 45 members present abstained from voting.

The House adopted to retain the 0.1 percent tax on the taxable value of land and building, as proposed in the Bill.

Similarly, a 15 percent vacant land surcharge tax on the total amount of land tax for 10 thromdes was passed.    

A vacant land surcharge tax is applicable if no development is carried out on the land within two years from the date on which all of the urban services have been made available.




As members raised concerns about the unequal Property Assessment and Valuation Agency (PAVA) rate in some areas, Deputy Chairperson of the Legislative Committee, Karma Lhamo said that the PAVA on land valuation and compensation rate can be reviewed after the Bill is passed.

Drametse-Ngatshang MP, Ugyen Wangdi submitted to have a proper consultation with the local government while categorising the land under the PAVA rate.

Under concessions, the House adopted 90 percent tax concessions on the amount of land tax payable as wetland or chhuzhing and for highland communities.




However, the House adopted a tax concession not exceeding 70 percent tax from 50 percent of the amount of building tax payable on the protected traditional houses in urban centres.

Karma Lhamo said that the concession is given because although the property owners want to build concrete buildings, they are mandated to keep the traditional houses.

While Bartsham-Shongphu MP Passang Dorji said that tax exemptions for protecting the traditional houses should be 100 percent or otherwise, the government should provide them with additional incentives.




The House also deliberated on the consequences of non-payment of land lax and on appeal procedure. The House adopted that if an appellant is not satisfied with the decision of the appeal committee, the appellant may appeal to the appeal committee at the head office, or appeal board or before the court of law.

Member In-charge of the Bill, Finance Minister Namgay Tshering said that the members raised concerns that the increase in the property tax would have implications for the tenants and on the no equity and fairness on land categorisation.




He added that the house owners get 100 percent deductible expenses on their tax while filing personal income tax as per the Income Tax Act of Bhutan 2001.

Lyonpo also said the ministry will include the land categorisation issues in rules and regulations under the Act.

He added that Section 57 on remission is kept if the adopted Bill needs rework and adjustments in future.




Section 57 gives the finance ministry the authority to prescribe in the rules that the tax payable in respect of category of land or buildings for a period to be remitted wholly or in part, and prescribe the applicable conditions for remission on the joint recommendation of the ministry responsible for human settlement and the National Land Commission.

The Bill as money bill will be forwarded to the National Council for deliberation.