Property Taxes in Thailand. Thailand has undergone significant tax reforms in recent years, particularly with the introduction of the Land and Building Tax Act B.E. 2562 (2019). Understanding the various property-related taxes is essential for property owners, investors, and foreigners looking to buy, lease, or develop real estate in Thailand.
This article provides a detailed analysis of property taxes in Thailand, including:
✔ Land and Building Tax (new annual property tax system)
✔ Transfer Fees and Specific Business Tax (when selling property)
✔ Withholding Tax (when transferring ownership)
✔ Rental Income Tax (for landlords and foreign investors)
✔ Inheritance Tax and Gift Tax (when passing down property)
1. Land and Building Tax (Annual Property Tax in Thailand)
The Land and Building Tax Act (2019) replaced the older and outdated House and Land Tax system. This is a yearly tax imposed on landowners, with rates varying based on the type of property usage.
Who Pays the Land and Building Tax?
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Owners of land, houses, condominiums, and commercial buildings.
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Foreigners who own condominiums must pay tax on their units.
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Usufruct holders, long-term lessees, or superficies holders may be liable if they control the property.
Tax Rates (Updated as of 2024)
| Property Type | Tax Rate (Annual, Based on Assessed Value) |
|---|---|
| Agricultural Land | 0.01% – 0.1% |
| Residential Property (Primary Residence) | 0.02% – 0.1% |
| Residential Property (Not Owner-Occupied) | 0.02% – 0.6% |
| Commercial & Industrial Properties | 0.3% – 1.2% |
| Vacant Land (Unused for Over 3 Years) | 0.3% (increases every 3 years, up to 3%) |
Exemptions and Reductions
✔ If the land or house is owner-occupied, no tax is due for values up to 50 million THB.
✔ Agricultural landowners receive lower tax rates and some exemptions.
✔ Properties used for charitable or government purposes are exempt.
✔ Condominiums owned by foreigners are subject to this tax, unless exempt under special rules.
2. Transfer Fees and Taxes When Selling Property
When selling real estate in Thailand, several one-time taxes and fees apply. These include the transfer fee, specific business tax, withholding tax, and stamp duty.
2.1 Transfer Fee
✔ Rate: 2% of the government-assessed value of the property.
✔ Who Pays?: Usually shared between buyer and seller (negotiable).
✔ Calculation: Based on Land Department’s appraised value (not the actual sales price).
2.2 Specific Business Tax (SBT)
✔ Rate: 3.3% (includes 3% tax + 0.3% local tax).
✔ Who Pays?: The seller, if the property has been owned for less than 5 years.
✔ Exemptions: If the property was inherited, owned for more than 5 years, or the seller is a private individual (not a company).
2.3 Stamp Duty
✔ Rate: 0.5% of the registered sale price.
✔ Who Pays?: The seller (only if exempt from SBT).
✔ Not Payable If: Specific Business Tax applies.
2.4 Withholding Tax (Income Tax on Property Sale)
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For Individuals: Calculated on a sliding scale (progressive tax), based on the property’s assessed value and the number of years owned.
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For Companies: Fixed at 1% of the registered sale price or government-assessed value, whichever is higher.
Example Withholding Tax Calculation (For Individuals):
If a seller owned a property for 10 years, the taxable income is divided by 10 and taxed based on the progressive tax rate (5%–35%).
3. Rental Income Tax (For Landlords & Foreign Investors)
If you rent out a property in Thailand, whether a condominium, house, or commercial space, rental income is taxable.
3.1 Personal Rental Income Tax (For Individuals)
✔ Tax is calculated based on progressive income tax rates (5%–35%).
✔ Deductible expenses: Landlords can deduct 30% of gross rental income as expenses before tax calculation.
Example:
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Annual Rental Income: 500,000 THB
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Deductible Expenses: 30% (150,000 THB)
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Taxable Income: 350,000 THB → Progressive tax rate applies
3.2 Corporate Rental Income Tax (For Companies)
✔ Flat Corporate Tax Rate: 20% on net profit from rental income.
✔ Additional VAT (7%) may apply if the company earns over 1.8 million THB per year.
4. Inheritance Tax and Gift Tax on Property Transfers
Thailand imposes inheritance and gift taxes on real estate transfers between family members or heirs.
4.1 Inheritance Tax
✔ Applies when the estate exceeds 100 million THB.
✔ Tax Rates:
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0% for heirs who inherit less than 100 million THB.
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5% for direct heirs (spouse, children, parents).
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10% for other beneficiaries (e.g., siblings, business partners).
4.2 Gift Tax (Donating Property to Family Members)
✔ Parents can gift property to their children with reduced tax rates:
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If below 20 million THB → Tax-free.
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If above 20 million THB → Subject to 5% tax.
✔ Non-family members receiving property as a gift pay up to 10% tax.
5. Additional Tax Considerations for Foreigners
✔ Foreigners cannot own land but can own condominiums (under the 49% foreign quota).
✔ If a foreigner sells a property, the buyer may need to provide proof of the original foreign exchange remittance to repatriate funds.
✔ If a foreign company owns the property, additional corporate tax obligations apply.
6. Summary of Key Property Taxes in Thailand
| Tax Type | Rate | Who Pays? |
|---|---|---|
| Land & Building Tax (Annual Tax) | 0.01% – 1.2% (depends on property type) | Property owner |
| Transfer Fee | 2% of appraised value | Buyer & Seller (negotiable) |
| Specific Business Tax (SBT) | 3.3% (if owned <5 years) | Seller |
| Stamp Duty | 0.5% (if no SBT applies) | Seller |
| Withholding Tax | 1% (companies) or sliding scale (individuals) | Seller |
| Rental Income Tax | 5% – 35% (individuals) or 20% (corporations) | Landlord |
| Inheritance Tax | 5% – 10% (if >100M THB estate) | Heirs |
| Gift Tax | 5% – 10% (if above 20M THB) | Recipient |
7. Conclusion: Managing Property Tax Obligations in Thailand
Understanding Thailand’s property tax system is crucial for real estate investors, homeowners, and foreigners looking to buy or rent properties. The Land and Building Tax Act (2019) introduced significant reforms, and investors should carefully structure transactions to optimize tax efficiency.
To ensure compliance and minimize tax liability, it’s advisable to consult a tax expert or property lawyer when buying, selling, or leasing real estate in Thailand.