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legal: Property Tax in Thailand
Do landlords have to pay tax in Thailand?
What taxes are landlords subject to in Thailand?
07/02/2022
Purchasing real estate for the purpose of earning rental income is a popular form of investment for many people. Current Thai laws allow foreigners to fully own condominiums in Thailand, but is it possible for foreign owners to rent their property?
In short, the answer is yes, but this type of income is subject to tax. In this article, we will provide details about which types of taxes landlords are subject to in Thailand.
Can foreigners own and lease out property in Thailand?
Thailand has no restrictions relating to nationality when buying/selling a condo, therefore any
foreigners can buy and own a condo unit. In fact, there are many examples of condo units being owned by foreigners throughout Thailand.
While it is possible for a foreigner to purchase a condo, there are some restrictions that prospective buyers need to be aware of. For example, under Thai law, foreigners may only own 49% of a single condo development. Essentially, this means that foreign ownership in the development cannot exceed 49% of the total number of all condo units. For example, if a development consists of 100 units, foreigners can only own 49 of those units. If you are interested in buying a condo it is best to check with the development’s jurisdiction office and make sure the building has not reached the foreign ownership quota.
There are however, no restrictions on the number of condominium units that a foreigner can buy. It is possible for foreigners to buy condominium units either off plan (new project or development) or second hand. Foreigners are free to resell any condos they have purchased at any time.
For more information and details on how to purchase a condo in Thailand, please take a look at our ebook on the subject. You can view or download the ebook by clicking here.
A foreigner in Thailand is subject to income tax on assessable income from Thai sources (regardless of payment location). Rental income from a tenancy is subject to personal income tax plus other property taxes.
Please note, that at the time of writing it is not possible for foreign individuals to own land in Thailand.
What taxes am I subject to when renting out my property in Thailand?
Tax on renting income for condo owned directly by a foreigner
- Income tax
Section 40, sub section 5 of Thai Revenue concerns income tax in Thailand. Section 40 (5(a)) states that income from leasing a property to others is subject to income tax under section 40 of the revenue code.
How to calculate how much income tax you owe
There are two methods of calculation for income tax, the Net Income Method and the Assessable Income method
1 • Net Income Method
This method of calculation will include rental income and deductible property expenses. The final amount can be calculated using the following formula.
(Income – expenses – allowance) x tax rate (%)
As per the Thai Revenue Department, income from renting out a condo is eligible for a 10% deduction on income tax.
2 • Assessable income method
In the case where the income is more than one hundred million baht (including all sources of income), the following formula will be used.
All income X 0.5%
Personal income tax rates applicable to taxable income are as follows:
| TAXABLE INCOME (Thai Baht) | TAX RATE (%) |
| 0 - 150,000 | Exempt |
| More than 150,000 but less than 300,000 | 5 |
| More than 300,000 but less than 500,000 | 10 |
| More than 500,000 but less than 750,000 | 15 |
| More than 750,000 but less than 1,000,000 | 20 |
| More than 1,000,000 but less than 2,000,000 | 25 |
| More than 2,000,000 but less than 4,000,000 | 30 |
| Over 4,000,000 | 35 |
House and Land tax
All rental income is also subject to House and Land tax. House and Land tax is currently set at 12.5%. The landlord must pay this tax in February of each year or alternatively they can apply to pay via 3 installments.
Stamp duty
If there is a hire/rental of property contract under section 537 of Thai Civil and Commercial Code, there is a requirement for both companies and private landlords to pay stamp duty.
Stamp duty for the rental of land, building, other construction or floating house is set at 1 THB for every 1,000 Baht or fraction thereof of the rent or key money or both for the entire lease period.
Tax on renting income if the condo is owned through a company registered in Thailand
If there is a hire/rental of property contract under section 537 of Thai Civil and Commercial Code, there is a requirement for both companies and private landlords to pay stamp duty.
Stamp duty for the rental of land, building, other construction or floating house is set at 1 THB for every 1,000 Baht or fraction thereof of the rent or key money or both for the entire lease period.
Property Tax in Thailand on renting income if the condo is owned through a company registered in Thailand
According to section 65 of Revenue code, a company which is doing business in leasing a property must pay tax by including the rental income in the calculation of net profit.
Rental income being paid abroad
One important factor to note is that any rental income which is earned in Thailand but paid abroad is subject to a 15% withholding tax.
In conclusion
As a popular destination for expats and investors alike, Thailand is a great place to invest in real estate. Thai law makes it possible for foreign investors to purchase a condo and rent it out to tenants. Such transactions are subject to the taxes mentioned above. The Belaws team of real estate and taxation experts are readily available to assist you with all your needs.
For more information about our real estate and tax services, please follow these links:
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