What Foreign Buyers Should Know About Property Taxes in Thailand

Do foreigners pay property tax in Thailand? 

Yes — foreign buyers in Thailand are subject to several property-related taxes, depending on how the property is owned, used, and whether it generates rental income. These include one-time transfer taxes when buying or selling, annual land and building taxes, and income tax on rental earnings. While Thailand’s property taxes are relatively low compared to many Western countries, misunderstanding them can lead to unexpected costs or penalties. This guide explains exactly what foreign buyers need to know before investing.

Introduction: Why Property Taxes Matter for Foreign Buyers

Thailand is rightfully known as the Land of Smiles. From the vibrant energy of Bangkok to the relaxed coastal lifestyle of resort cities, the country attracts thousands of foreign property investors every year.

However, many buyers focus almost entirely on the purchase price of a condominium or villa, overlooking the taxes and fees that come with ownership. These additional costs — especially transfer taxes and annual property taxes — can significantly affect your overall investment return.

Understanding Thailand’s property tax system is not just about legal compliance. It is about budgeting accurately, avoiding penalties, and making smarter long-term investment decisions.

This article breaks down:

• Property ownership rules for foreigners

• One-time taxes when buying or selling

• Annual land and building taxes

• Rental income tax obligations

• Common mistakes foreign buyers should avoid

An Introduction to the Thai Property Market

Before looking at tax figures, it is essential to understand what foreigners can legally own in Thailand.

What Can Foreigners Own?

Freehold Condominiums
This is the most common and straightforward option for foreign buyers. Foreigners may own condominium units in their own name, provided that foreign ownership does not exceed 49% of the total sellable floor area of the building.

Land and Villas
Foreigners generally cannot own land outright. Villas are usually acquired through:

• A 30-year leasehold (renewable by contract), or

• Ownership via a Thai Limited Company, which must comply strictly with Thai corporate and nominee laws.

The ownership structure you choose — freehold condo or leasehold villa — directly affects which taxes apply.

One-Time Taxes When Buying or Selling Property in Thailand

All transfer-related taxes are paid at the Land Department on the day ownership is transferred. These are calculated based on the government appraised value, not always the agreed sale price.

1. Transfer Fee

• Rate: 2% of the appraised value

• Who pays: Commonly split 50/50 between buyer and seller, but fully negotiable

2. Specific Business Tax (SBT)

Designed to discourage short-term speculation.

• Rate: 3.3% of the appraised value or sale price (whichever is higher)

• Who pays: Seller (often negotiated)

• Applies when: Property held for less than 5 years

• Exemption: Individuals holding property longer than 5 years

3. Stamp Duty

Only applies if SBT does not apply.

• Rate: 0.5%

• Who pays: Typically the seller

• Applies when: Property held for more than 5 years

4. Withholding Tax (WHT)

Collected at source during the transfer.

• Company sellers: 1% flat rate

• Individual sellers: Progressive rate based on holding period and income level

Annual Property Taxes in Thailand (Land & Building Tax)

Since 2020, Thailand has used the Land and Building Tax Act B.E. 2562, which simplified the system and introduced usage-based taxation.

Tax Rates (2023–2026 Cycle)

Rates are applied to the Treasury appraised value:

• Residential (second homes / rentals): 0.02% – 0.30%

• Commercial / industrial: 0.30% (up to 0.70%)

• Agricultural: 0.01% – 0.10%

• Vacant land: Starts at 0.30%, increasing every 3 years if unused

Are There Residential Exemptions?

Yes — but they mainly benefit full-time residents.

• House + land (principal residence):
  First 50 million THB tax-free if the owner’s name appears in the house registration as of January 1st

• House only (land leased):
  First 10 million THB tax-free if registered as principal residence

Most foreign investors fall into the “other residential property” category and pay between 0.02% and 0.30% annually.

Taxes on Rental Income in Thailand

If your property generates rental income, you must pay income tax in addition to the Land and Building Tax.

How Rental Income Is Taxed

• Thai tax residents (180+ days/year):
  Rental income is added to total income and taxed progressively (0%–35%)

• Non-residents:
  Subject to a flat withholding tax, typically 15%

Can Expenses Be Deducted?

Yes. You may choose one of the following:

• Standard deduction: 30% of gross rental income

• Actual expenses: Maintenance, agent fees, repairs (with receipts)

Step-by-Step Guide to Paying Property Taxes

Step 1: Transfer Taxes (Purchase or Sale)

Paid at the Land Department on transfer day. No separate filing required.

Step 2: Annual Land and Building Tax

1. Assessment notice issued (usually February)

2. Verify property usage classification

3. Payment due by April (office, bank transfer, or QR payment)

Step 3: Rental Income Tax

• PND 94: Mid-year return (by September 30)

• PND 90: Annual return (by March 31)

• Filed online or at the Revenue Department (Tax ID required)

Common Mistakes Foreign Buyers Make

• Ignoring vacant land tax increases

• Failing to declare rental income

• Misunderstanding leasehold tax responsibilities

• Missing payment deadlines (40% surcharge + monthly interest)

Practical Tips for Foreign Property Owners

• Use a qualified property lawyer

• Apply for a Thai Tax ID if earning rental income

• Keep all receipts and official documents

• Monitor your tax residency status (180-day rule)

Frequently Asked Questions

If I lease land but own the house, who pays the tax?
The landowner pays land tax; the house owner pays building tax. Lease contracts may shift responsibility — always check carefully.

Do company-owned properties receive residential exemptions?
No. Companies are taxed at commercial or “other” rates.

Can foreigners be listed in a Tabien Baan?
Most foreigners are listed in a Yellow House Book, which proves residence but does not automatically grant tax exemptions.

Final Thoughts: Property Taxes for Foreign Investors in Thailand

Property taxes in Thailand are relatively low, but mistakes can be expensive. By understanding transfer fees, annual taxes, and rental income obligations, foreign buyers can plan accurately and invest with confidence.

For peace of mind, always consult a professional lawyer or tax advisor before purchasing or renting out property in Thailand.