Thukten Zangpo

Property owners can claim a refund for vacant land tax paid if urban amenities are unavailable or if land development is in progress, as announced by the Department of Revenue and Customs (DRC) under the finance ministry on April 15th.

However, the taxpayer’s claim must be endorsed by the respective thromde or municipal office

Although the deadline for property tax filing has been extended until April 30, many have already made their payments using the online property tax payment system.

According to the finance ministry, 15 percent of the land tax amount is levied as vacant land tax in specified areas and precincts where urban amenities like road access, electricity, drinking water and sewerage services have been provided by the government.

Ten areas that fall under the vacant land tax are nine thromdes—Thimphu, Wangdue, Punakha, Trashigang, Gelephu, Samdrupjongkhar, Samtse, Phuentsholing, Mongar, and Paro town precinct.

Land tax for the E4 in Babesa or Simtokha in Thimphu is Nu 12,156 annually with a revised tax. If the land is vacant, given that the urban amenities are in place, the property owners will be taxed Nu 1,823 more as vacant land tax.

The Property Act of Bhutan 2022 also states that the vacant tax is applicable if the owner of the land is not restricted by law, including court order, or any prevailing rules or regulations from constructing a building on the land.

At the same time, no development has been carried out on the land within two years from the date on which all of the urban services have been made available.

However, some property owners say that they have to pay the vacant land tax despite the loan moratorium on the housing loans.

The government suspended the loans for the commercial housing and hotel constructions from June last year. The decision was made with the associated outflow of foreign currency, high credit concentration and risk of non-performing loans.

As of June, last year, the housing loan topped the total credit portfolio with 28 percent, reaching Nu 58.5 billion.

Joint-ownership and pending thrams

The DRC also notified that the joint owners of land or building or flats, who do not have issues with the ownership shares reflected in the property tax system can proceed to pay tax online.

However, the joint owners of land or building or flats, who wish to pay their own portion of the property tax, but whose proportionate land rights are not reflected in the thram, are requested to update the thram or flat details by visiting land sector offices and then accordingly pay the tax online.

For pending thrams, the DRC stated that an interim measure to collect taxes is currently being worked upon and will be notified later. It added that the property tax system does not have the data for tax payment of pending thrams because of dispute, absentee, excess, deficit, Tibetan thrams, incomplete Kappa, NCRP and NSC pending among others.

The DRC also stated that the tax payment for properties in the name of the deceased with citizenship identity card number, the heir can pay tax. However, if the tax payment has to be made without the deceased citizenship identity card number, the thram has to be updated by producing a court order as per the inheritance Act.