Property taxes in Thailand

Thailand's real estate market is an attractive option for both local and foreign investors. However, understanding the country's property tax system is crucial for making informed investment decisions. This guide covers the essential property taxes in Thailand, including land and building tax, transfer fees, withholding tax, specific business tax, and rental income tax.

Land and Building Tax in Thailand

The Land and Building Tax, introduced in 2020, is an annual tax replacing the previous House and Land Tax. The rates depend on property usage:

• Agricultural Use: Up to 0.15%
• Residential Use: Up to 0.30%
• Commercial Use: Up to 1.20%
• Unused or Vacant Land: Up to 1.20%

The tax is calculated based on the government's assessed property value, with progressive rates applied.

Who Pays the Land and Building Tax?

This tax is payable by the landowner or property holder annually. For residential properties, tax exemptions may apply for primary residences under a certain value.

Property Transfer Fees in Thailand

When buying or selling property in Thailand, a 2% transfer fee applies based on the appraised property value. This fee is typically negotiated between the buyer and seller, with costs often shared equally.

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Key Considerations for Buyers:

• Ensure the appraised value is accurately assessed.
• Factor in the transfer fee when budgeting for a purchase.

Withholding Tax on Property Sales

The withholding tax applies when a property is sold and is calculated based on the seller’s status:

• For Individual Sellers: A progressive tax of 5% to 35% based on the appraised value and ownership duration.
• For Corporate Sellers: A 1% flat tax on the higher of the appraised or actual sale price.

Since this tax functions as a prepayment of income tax, sellers should factor it into their net profit calculations.

Specific Business Tax (SBT) and Stamp Duty

Specific Business Tax (SBT)

If a property is sold within five years of acquisition, the seller is subject to a 3.3% tax (including local tax) on the appraised or actual selling price.

Stamp Duty

If the SBT does not apply, the seller must instead pay a 0.5% stamp duty.

Rental Income Tax in Thailand

Property owners who earn rental income in Thailand must pay tax based on their tax residency status:

• Individuals: Subject to Thailand’s personal income tax rates after deductions.
• Companies: Pay corporate income tax on rental earnings.

Final Thoughts: Planning for Property Taxes in Thailand

Understanding Thailand’s property tax system is essential for anyone buying, selling, or investing in real estate. Key takeaways include:

• Annual tax obligations depend on property usage.
• Transaction taxes impact the total cost of buying or selling property.
• Rental income tax varies depending on ownership structure.

Before making a property investment in Thailand, consult a real estate tax expert to optimize financial planning and ensure compliance.

Looking for Expert Guidance?

If you're considering buying property in Thailand, our team can help you navigate legal requirements and optimize tax efficiency. Contact us today for a consultation! DDA Real Estate experts will help you with anything. We provide a wide range of consulting services. Call us or contact us through chat!