Overview of all property taxes in Thailand

Property taxes in Thailand are crucial to understand when buying, selling, or renting properties, as paying taxes can be challenging for foreigners unfamiliar with the country’s tax system. This article will discuss the different property taxes in Thailand, including the Transfer Tax, Capital Gains Tax, Withholding Tax, Land and Building Tax, and more.

Thailand property taxes

Below is a table of the property taxes in Thailand, including the tax amount and liable payer:

1. Transfer Tax

A transfer tax is a property tax in Thailand levied to transfer property ownership from one party to another. The buyer typically pays the transfer fee of 2% of the appraised property value. However, if both parties agree, the seller and buyer can split this fee in half.

2. Land and Building Tax

In 2019, the Thai government introduced the Land and Building Tax Act to promote proper land utilization and prevent land hoarding. This property tax in Thailand is imposed on property owners, including individuals and businesses owning land, buildings, or condominiums. Property owners are required to pay this tax annually, with the deadline typically falling in April. Below is the breakdown of the land and building tax, depending on the property use:

• Agricultural: A 0.15% tax rate is imposed on agricultural land, including lands for crop farming and livestock (land and aquatic).
• Residential: A 0.3% tax rate is levied on properties for residential purposes.
• Commercial: A 1.2% tax rate on land and property used solely for commercial purposes.
• Vacant or unused land: A tax rate of 1.2% is imposed on land or properties left vacant or not reasonably used.

Tax exemptions

The following are exempted from paying land and building tax:

• Agricultural land valued at or below;
• Residential property whose owner’s name appears on the title deed and is valued at or below, and;
• A residential building valued at or below whose owner’s name appears on the title deed, but another person owns the land.

3. Capital Gains Tax (CGT)

While Thailand has no separate Capital Gains Tax for property sales, sellers are taxed on their profits. Profits from the sale of a property are generally considered taxable income. This means the gain is added to your overall income and taxed according to the progressive income tax rates. This profit, also known as capital gains, can be subject to income tax depending on the seller’s type:

• Individuals: The Capital Gains Tax in Thailand for individuals selling property can range from 0% to 35% based on the progressive income tax rate for personal tax. This tax is lowest at 0% for net income of and below and highest at 35% for income over .
• Companies: The Thailand corporate tax rate is 15% to 30% for companies paying CGT, which is 0% for net profit amounting to and below, 15% for profits ranging to and 30% for profits above .

4. Withholding Tax (WHT)

Individuals or companies selling a property are subject to income tax, and a portion of their income tax can be withheld upfront. This is known as withholding tax, and the government uses this mechanism for efficient tax collection and reduced tax evasion. It acts like a deposit towards the final income tax the seller owes on the property sale. The tax rate for withholding tax in Thailand depends on the seller’s type:

• Companies: For companies selling property, the withholding tax is a flat 1% of the property’s registered or appraised value (whichever is higher).
• Individuals: The withholding tax in Thailand for individual sellers is more complex. The rate is calculated progressively, depending on the length of ownership and the property’s appraised value.

5. Special Business Tax

If you sell your property in Thailand within five years of buying it, you’ll pay a Specific Business Tax (SBT) instead of a Stamp Duty. The SBT has a flat rate of 3.3% and is applied to the higher value between the government’s appraised value of the property and the actual selling price. Moreover, this tax applies to Thai companies that are not registered for Value-Added Tax (VAT). 

6. Stamp Duty

Stamp Duty is a property tax in Thailand charged on instruments or legal documents required for a property sale. It has a 0.5% tax rate in Thailand, and the total amount is computed using the property’s market value or appraised value, whichever is higher. The seller is liable for paying Stamp Duty but may be excused if the sold property is already subject to a Specific Business Tax.

7. Rental Income Tax

Many foreigners are venturing into the rental business due to the high demand in the market. Rental income tax for foreigners in Thailand exists under the Thai Revenue Code section 40(5), stating that money gained from the property rent is taxable regardless of tax residency status or where the rent is deposited. The tax rates are specified for each taxpayer below:

• Thai residents: Rental income tax is determined based on the Personal Income Tax (PIT) for individuals. This tax applies progressively, meaning the tax rate increases as your rental income increases. The tax rate in Thailand for residents ranges from 0% to 35%.
• Non-residents: Non-resident individuals earning rental income are subject to a 15% flat tax rate on their gross rental income.
• Corporations: Foreign property owners who channel their rental income through a Thai company will be subject to Corporate Income Tax (CIT) instead of Personal Income Tax (PIT).  The Thailand corporate tax rate ranges from 0% to 20% for CIT.

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