There are several ways in ensuring and filling the coffers of a sovereign country and one of them is taxation of real properties. In Thailand, real estates are taxed in three (3) distinct ways:

• Local property Taxes

  These taxes are based on lands and buildings with rate varies accordingly but often times, the amount are very minimal.

• Transfer Taxes

  This is paid when a property is sold by one party to another. Either of the parties may pay the transfer tax depending on their negotiations. The tax rate would differ too but if it is the seller who will be paying for it, the rate would be higher.

  Payment of this tax can be done at the Land Department.

• Rental Income taxes

  Property owners have to pay taxes for the income they earn from renting out their properties to other parties. Corporations who rented out their properties to other parties or even if it is themselves who occupied the properties they owned, they would still have to pay annual taxes.

Stamp Duty and Special Business Tax

Either the Stamp Duty or the Special Business Tax will apply depending on when the property is sold.

If the property is sold within the first five (5) years of ownership then it is the 3.3% Special Business Tax that would apply. The rate would be based on the selling price of the property.

On the other hand, if the property is sold after five (5) years of ownership, the Stamp Duty would apply in which the rate is 0.5% of the selling price.

Additionally, the Special Business Tax would normally be imposed if the seller of a property is a developer.

Transfer Taxes

When a property's ownership is transferred from one party to another, the Land Department would impose Transfer Duty which is 2% of the property's assessed value.

Withholding Tax

If the seller of the property is an individual, the calculation of the Withholding Tax is progressive rate based on the appraisal value of the said property.

If the seller is a company then the Withholding Tax rate is at 1% of the sales price or the 1% of the assessed value, depending on whichever is higher of the two.

Taxes on Rental Income

The House and Land Tax on rental income is not due if and when the actual occupant of the property is the owner of such property himself. But if he rented such property to another party or have it on commercial use then taxation would be applicable.

If the owner of the property is a company and even if it did not rented out the property in question to another party, taxation is still due as it is considered that the said property is put on commercial use. The rate is at 12.5% of the property's actual or estimated annual rental value, depending on which is higher of the two.

Withholding Tax from Rental Income

If a property, owned either by an individual or company, has a company as its tenant, the owner of the said property will only receive 95% of the agreed rent as the tenant is required by law to pay the remaining 5% of the rent directly to the government.

 

See also the rates of property tax for condominium, villa, or house.