Housing and Land Tax in Thailand

If you own or thinking of buying a house in Thailand then there is an annual tax which needs to to paid. This is based on 12.5% of the rental income of the property. If you live in the house which you own then this is not needed. If you are leasing the property to another this tax is payable even when it is commercial property.

Housing and Land Tax in ThailandMany have over the years tried to lower the income to pay less tax however this was changed to be either the rental income of the municipal value of the property each year. Check with an attorney as to the house and land tax and how this could affect you if you own investment property in Thailand. This ‘rental tax’ is normally paid in February when most tax returns are done by the Receiver of Revenue in Thailand. Note that they normally do not check the property and that you normally have to inform the government about the rental agreement. Should you not and they do check then they might demand penalties on the property by looking at the Land Department to see how long the agreement has been agreed to and how long it has been in existence.

If you are leasing property then many expats lease the land and own/build the house. In this way there is no tax payable under the house and land tax. This is rarely done as most simply depend on the owner of the property to take care of the rental taxes. Note that this also applies to a condo unit and you need to speak to an attorney in Bangkok about property rental agreements and the rental taxes. If the property you own is registered in the name of a business like many do then while you live in it as a director you are still liable to the rental tax as you do not own the property but the business owns the business. Many lease agreements do not mention this nor do many property attorneys bring up the topic when an expat is buying property.

There have been a number of tax proposals over the years. Many are simply based on a straight 0.5% property value tax each year to cut down on the Land Department doing random inspections on property taxes. Speak to our attorneys in Thailand for more information on property rental taxes and how best to draft a lease agreement even if you are going to live in the property yourself. The tax penalties can be crippling.


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