In Thailand, property tax is primarily in the form of land and building tax. The tax is imposed on the ownership, possession or right to use land and buildings. The tax is collected by the local government and the revenue is used to fund local development projects.
There are 2 different types of tax levied on property in Thailand that you need to be aware of:
Land tax is an annual tax levied on land ownership equivalent to just a few Baht per rai for properties held as private residences. For properties held by companies the tax can be significantly higher. Under current legislation the property owner is expected to pay at local government office every year. However, there is no tax bill sent out and in practice it is rarely chased up. The problem of unpaid tax liability usually only surfaces when the property is being transferred, and no transfer can go ahead while there are unpaid taxes on the property.
Structures Usage Tax
This only applies to properties used for commercial purposes or rental properties. This is applicable at the rate of 12.5% on the actual or assessed gross rental value of the property. If the house is purchased through a company, you need to consider that corporate tax is higher than personal tax, and the cost of setting up the company has to be considered as part of the initial investment.
| Fees Payable | Sale of Freehold Property | Transfer of Leasehold Property | Sale of Building | Liability to Tax |
| Transfer Fee | 2% | – | 2% | Seller/Buyer |
| Lease Registration Fee | – | 1% | – | Lessor/Lessee |
| Business Tax | 3.3% or N/A | – | 3.3% or N/A | Seller |
| Stamp Duty | 0.5% or N/A | 0.1% | 0.5% or N/A | Seller |
| Withholding Tax | 1% or 5 – 37% | – | 1% or 5 – 37% | Seller |
Transfer fee
The Thailand Land Department charges 2% of the assessed value of all the transfers of land and property. This fee is normally shared equally between both buyer and seller, although this needs to be agreed by both parties.
Lease registration fee
A real estate lease registration fee is charged at the rate of 1 % of the total rental throughout the whole lease term and collected by the land office at the time of registration.
Specific Business tax
Specific Business Tax (SBT) is payable by companies and individuals who have owned the property less than 5 years. the seller must pay the 3.3% fee.
Stamp Duty
Stamp Duty is only paid when SBT is not applicable and is based on the official appraised value or the contracted price, whichever is higher, this duty includes 0.5% of the value or the purchasing price, depending on the highest amount. This tax is not applied to the business tax and is normally paid by the seller.
Withholding tax
- if the seller is a company withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher).
- if the seller is a private person withholding tax is calculated at a progressive rate based on the appraised value of the property.
