The property taxes in Thailand

As property owner, you will find taxes in any country in the world, and Thailand is no different. As such, when you are looking into property investment opportunities in the country, you should also consider how property taxes in Thailand might affect your ROI.

What is property tax?

It’s a tax that a property owner will be expected to pay and the amount is typically calculated by the local government based on the value of the land and/or the property. An assessor will be requested to give a fair valuation of the value of the property. The tax money is usually used to help fund local services such as schools, hospitals, and roads.

The property tax in Thailand is not imposed on residences that are occupied by the owner of the property. However, if the land is used for commercial purposes, such as when it is being rented out, then the tax will be imposed. The tax is collected yearly according to the rental value, although the local authority can adjust the value if they deem appropriate.

Property taxes in Thailand are favorable when they are compared with many other countries, including Hong Kong. In Thailand, the property tax rate is 12.5% of the yearly rental. In Hong Kong, property tax is also based on rental income and it currently stands at 15%.

What are the taxable properties and the exemptions?

In Thailand, taxable properties are broken down into three main categories:

- Buildings: These are constructions that are habitable or can be used in other ways. This excludes parts attached to buildings that cannot be used.
- Land: This includes ground that includes waterways and hills. The sea and rivers are not considered to be land.
- Condominiums: These are units within buildings that have been granted condominium status according to the Condominium Act.

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Exempt Properties

Not all properties are subject to property taxes and this includes properties that are occupied by the owner, provided it is their first property.

Other exemptions to property tax in Thailand include:

- Common properties as listed under the Condominium Act. These include swimming pools, parks, and fitness rooms.
- Properties in subordinate legislations. These include museums, railways, roads, wells, fences, and lawns.
- Private properties that the public can use for their own benefit.
- Non-commercial state-owned properties.
- Properties owned by religious organizations and are used for religious purposes.

Taxable Persons

There are also laws that state who is liable to pay property tax in Thailand:

- Beneficiaries to buildings or land that is owned by the government: It includes people who are tenants of a state-owned property.
- A person who is liable for paying tax on the behalf of another person: It includes people like carers and legal guardians/representatives of young people or disabled people. Co-owners are also liable to pay property tax on behalf of the other people they own the property with.
- The owner of land and buildings, whether they are individuals or corporations: If a company fails to pay tax on a property, a director will be expected to pay tax on the company’s behalf.

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Other rules regarding property taxes in Thailand

Is there a rental income taxation in Thailand?

If you rent out a property, then the income is liable to 5% withholding tax. This will be charged according to the gross income, minus expenses incurred. While foreigners are permitted to rent out their property in Thailand, they are not permitted to do so if they are operating as a business.

Landowners are also liable for capital gains tax, and the rate is the same as other standard income tax rates. There is also a transfer fee, which is 2% of the value of the property, and this is to be paid by the buyer.

Are there other fees to pay on properties?

Sellers will also be expected to pay a stamp duty of 0.5%, and a business tax of 3.3%. This applies to individuals and companies. There is also a withholding tax of 1%.

Is there a house tax in Thailand?

There is no house tax in Thailand. However, there is a tax on household waste, but this amount is nominal.

Shall I declare my property in Thailand in my home country?

Some countries have a double taxation treaty with Thailand, in which case the tax will be payable in the country the property is located. Not all countries have such a treaty with Thailand, however, and you will need to check to see if you are liable.

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