Property Taxes in Thailand

Property Taxes in Thailand. Property ownership and use in Thailand are subject to multiple forms of taxation, administered under a legal framework designed to balance state revenue generation with investment incentives and land use regulation. Property taxes in Thailand are not consolidated under a single law but are instead governed by a mix of national and local statutes, most notably the Land and Building Tax Act B.E. 2562 (2019), Land Code B.E. 2497, and Revenue Code B.E. 2481.

Understanding these taxes is essential for property owners, investors, developers, and long-term lessees—particularly foreign nationals, who may face indirect property tax obligations depending on how they structure their land use rights.

This article provides a comprehensive and legally detailed analysis of property taxes in Thailand, covering statutory provisions, assessment methods, tax rates, exemptions, and procedural compliance.

1. Overview of Tax Regime on Property

Thailand imposes four main categories of taxes and fees related to property ownership, transfer, and use:

2. Land and Building Tax (Effective Since 2020)

The Land and Building Tax Act B.E. 2562 replaced the old House and Land Tax and Local Development Tax, modernizing Thailand’s property taxation system.

2.1 Who Pays the Tax?

• The owner, possessor, or user of the land or building as of January 1st each year

• Applies to individuals, juristic persons, and long-term lessees (under some conditions)

Foreigners who lease land (e.g., 30-year lease) may be liable depending on lease terms and practical control.

2.2 Tax Base

• Calculated based on the appraised value of land and buildings, as determined by the Department of Lands

• Includes:

  • Residential houses

  • Commercial buildings

  • Vacant land

  • Condominiums

2.3 Tax Rates (2023 Schedule)

Tax is progressive and capped annually by ministerial notification. Local authorities may reduce or defer taxes in some situations.

2.4 Exemptions and Reductions

• Owner-occupied residential land and house (first THB 50 million exempt for individuals)

• Agricultural land for natural persons (up to THB 75 million exempt)

• Government and religious use: fully exempt

• Temporary waivers in special circumstances (e.g., COVID-era reductions)

3. Taxes on Property Transfer

3.1 Withholding Tax (WHT)

• Paid by the seller

• Calculated based on either the official appraised value or the contract sale price, whichever is higher

For Individuals:

• WHT is calculated as personal income tax based on a sliding scale (5–35%) using a deemed income method

• Applies only if the seller is an individual selling a non-business asset

For Companies:

• WHT is fixed at 1% of the appraised or contract value, whichever is higher

3.2 Specific Business Tax (SBT)

• Applies if:

  • The property is sold by a company or individual engaged in property business

  • The property is sold within 5 years of acquisition (for individuals)

Individuals exempt from SBT if the property is held more than 5 years, or if seller has a household registration at the property for at least 1 year

4. Stamp Duty

• Imposed at 0.5% of the transaction value

• Paid only when SBT is not applicable

• Also applies to:

  • Lease agreements (rate: 0.1% of total rent over term)

  • Mortgages (0.05% on registered amount)

Lease stamp duty is shared between the lessor and lessee unless otherwise agreed.

5. Taxation of Rental Income

Rental income is subject to Personal Income Tax (PIT) under Section 40(5) of the Revenue Code.

• Standard deduction of 30% for expenses

• Taxed at progressive rates (5%–35%)

• Rental income must be declared annually, even if not formally registered at the Land Office

For juristic persons:

• Treated as business income, taxed at 20% Corporate Income Tax (CIT) rate

• Subject to Withholding Tax (5%) if paid by a company tenant

6. Property Tax Implications for Foreigners

6.1 Foreign Ownership Limitations

• Foreigners cannot own land in Thailand, but may:

  • Own condominium units (up to 49% of floor area in a project)

  • Lease land or property for up to 30 years, renewable

  • Own buildings (but not the land beneath) in some structures

6.2 Foreigners and Tax Liability

• Foreign owners of condominiums are liable for:

  • Land and Building Tax on the unit

  • Income tax on rental income

• Foreign long-term lessees may be liable depending on:

  • Contract structure

  • Whether the lease is registered

  • If they sublease or generate income

7. Administration and Compliance

7.1 Responsible Authorities

• Land and Building Tax: Collected by local administrative organizations (e.g., municipalities)

• Transfer taxes: Collected at Land Office during transaction registration

• Income and rental taxes: Filed with Revenue Department

7.2 Payment Deadlines

• Land and Building Tax: Due by April 30 each year

• Penalty for late payment: 0.3% per month interest, plus fines

• Tax notices are sent by post, but owners are legally obligated to pay even if no notice is received

8. Dispute Resolution and Appeals

• Errors in valuation or classification can be appealed to the relevant local administrative office

• Appeals must be filed within 30 days of receiving tax assessment

• Further appeal possible to the Tax Appeal Committee and eventually the Administrative Court

Conclusion

Thailand’s property tax framework, particularly after the enactment of the Land and Building Tax Act, has become more structured, transparent, and enforceable. While the tax rates remain moderate by international standards, the compliance obligations—especially around valuation, property use classification, and rental income—are strictly enforced by both local authorities and the national Revenue Department.

For property owners—especially foreign nationals and companies—understanding the interaction of land use rights, registration status, and tax exposure is essential to legal compliance and financial planning. As Thailand continues to refine its property taxation system, especially to support urban development and discourage speculative holding of unused land, tax planning will remain an indispensable component of property ownership.