Thailand remains one of the most attractive countries for real estate investment – not only because of the climate, infrastructure and rental demand, but also because of a loyal tax system that is clear and predictable for foreign buyers.
What to pay when buying, owning, selling and renting?
Let’s clarify a key point right away – tax rates directly depend on the form of ownership of the object.
1. FORMS OF OWNERSHIP
| Form | Essence | Deadline |
| Freehold (full ownership) | 100% ownership of the object, full right of disposal | indefinitely |
| Leasehold | Long-term lease, registered by the state | 30+30+30 years (up to 90 years under contract) |
2. REAL ESTATE PURCHASE TAXES
The buyer pays a mandatory fee to the Land Office, the Transfer Fee, which is charged upon transfer of ownership.
- Freehold – 2%
- Leasehold – 1%
Usually the expense is split 50/50 between the seller and the buyer. When buying from a developer, the law prohibits the transfer of more than 50% of the fee to the buyer.
State fee, paid at the Land Office when registering a property on the secondary market.
The amount of the state duty depends on the form of ownership, for Leasehold it is 1.1%, for Freehold – 6.3% of the value of the apartment (seller-individual). It is a common practice on the market when the seller offers to split the state duty in half, especially in case of bargaining or when the property is in high demand.
3. TAXES ON REAL ESTATE OWNERSHIP
Effective 2020, the Land and Building Tax Act B.E. 2562.
Tax rates (tax is calculated on the assessed value of the property, not the market value)
| housing costs below 10 million ฿ | no tax is payable |
| Housing costs from 10 million baht to 40 million ฿ | tax rate is 0.02% |
| Housing costs from 41 million baht to 65 million ฿ | tax rate is 0.03% |
| Housing costs from 66 million baht to 90 million ฿ | tax rate is 0.05% |
Benefits
– Condominiums and houses worth up to 10 million ฿ – 0.02% rate.
– The first 10 million ฿ of the main dwelling (if the owner is registered in the house book) is not taxed.
– If the owner is not entered in the yellow house book – rate 0.3%.
Example of calculation (if the owner is registered in the house book)
Cost of the object: 13 million ฿
Benefit: 10 million ฿
Tax base: 3 million ฿
Rate: 0.02%
4. TAXES ON THE SALE OF REAL ESTATE
1. Registration Fee (Transfer Fee)
Same rates as for purchase:
– Freehold – 2%
– Leasehold – 1%.
Usually split 50/50 between seller and buyer
2. business tax (Specific Business Tax)
Applies if you have owned the property for less than 5 years.
Consists of business tax – 3% and municipal tax – 10% of the amount of business tax itself.
Not charged if:
– Owned for more than 5 years;
– the seller is the heir;
– the seller transfers the property to the heir;
– the seller has been registered in the house book for at least 1 year.
3. Stamp Duty (Stamp Duty)
Payable if the property has been in possession for more than 5 years.
| Form of ownership | Bid |
| Freehold | 0.5% |
| Leasehold | 0.1% |
4. Withholding Tax (Withholding Tax)
Calculated on the basis of the assessed value and a special table of deductions depending on the period of ownership (the amount of purchase and sale of the property does not matter, the tax is calculated on the basis of the assessed value at the Land Office).
Tax deduction is calculated based on the time of ownership of the property according to a special table:
| Time of ownership, years | Deduction, % | Income | Personal income tax |
| 1 | 92 | 0 – 150.000 | 5% |
| 2 | 84 | 150.001 – 300.000 | 5% |
| 3 | 77 | 300.001 – 500.000 | 10% |
| 4 | 71 | 500.001 – 750.000 | 15% |
| 5 | 65 | 750.001 – 1.000.000 | 20% |
| 6 | 60 | 1.000.001 – 2.000.000 | 25% |
| 7 | 55 | 2.000.001 – 5.000.000 | 30% |
| 8 | 50 | 5,000,001 and over | 35% |
EXAMPLE OF CALCULATING WITHHOLDING TAX (WITHHOLDING TAX)
The property is worth 5,500,000 ฿, with a holding period of 3.5 years
1. determine the tax deduction rate according to the table below
3.5 years is rounded up to 4 years.
For 4 years, the tax deduction rate is 71%.
2. Calculate the taxable base for the entire period of ownership
Estimated value: 5,500,000 ฿
Deduction: 71%
Formula: 5,500,000 – (5,500,000 × 71%) = base for the entire period
Do the math:
5 500 000 × 71% = 3 905 000 ฿
5 500 000 – 3 905 000 = 1 595 000 ฿
This is the tax base for the entire period of ownership.
3. Calculate the base for 1 year of ownership
Period of ownership = 4 years
1 595 000 / 4 = 398 750 ฿
4. Apply progressive tax scale
Income for the year: 398 750 ฿
Break it down by level:
| Range | Bid | Calculation |
| 0 – 150 000 ฿ | 5% | 150 000 × 5% = 7 500 ฿ |
| 150 001 – 300 000 ฿ | 5% | 150 000 × 5% = 7 500 ฿ |
| 300 001 – 398 750 ฿ | 10% | 98 750 × 10% = 9 875 ฿ |
Summarize the tax for 1 year: 7,500 + 7,500 + 9,875 = 24,875 ฿
5. Multiplied by the number of years of ownership
24 875 × 4 = 99 500 ฿
✔ FINAL TAX ON INCOME RECEIVED
99,500 baht ≈ 1.81% of the appraised value
5. TAX ON RENTAL INCOME
Most properties in Phuket are purchased for rental purposes, so this point is important. Rental income can be generated by yourself or through a management company. If you rent by yourself, tax is filed in person or through a lawyer (service up to 5,000 ฿). If you work through a management company, all tax issues are taken care of by the management.
If you are not a tax resident
– fixed rate: 15% of the total rent
– no deductions or allowances
If you are a tax resident of Thailand
– Must reside 180+ days per year. Tax is calculated on a progressive scale.
– 70% of income is taxed after the standard 30% deduction.
| Income per year | Bid |
| 0-150 000 ฿ | 0% |
| 150 001-300 000 ฿ | 5% |
| 300 001-500 000 ฿ | 10% |
| 500 001-750 000 ฿ | 15% |
| 750 001-1 000 000 ฿ | 20% |
| 1 000 001-2 000 000 ฿ | 25% |
| 2 000 001-5 000 000 ฿ | 30% |
| > 5 000 000 ฿ | 35% |
Deductions:
– personal deduction: 30 000 ฿
– Leasehold: deduction = value of apartment / 30 years
– Dependents and children’s education expenses
EXAMPLE OF INCOME TAX CALCULATION (LEASEHOLD)
Cost of the apartments: 7 600 000 ฿
Form of ownership: Leasehold
Guaranteed income: 7% for 5 years
1. Annual income
7,600,000 × 7% = 532,000 ฿ per year
If you live in Thailand for more than 180 days per year, you become a tax resident and tax is withheld at a rate of 5% (Form PND3).
Primary withholding: 532,000 × 5% = 26,600 ฿
2. Tax deductions
Personal deduction – 30,000 ฿
The expense deduction for Leasehold is the value of the apartment / 30 years:
7 600 000 / 30 = 253 333 ฿
Final taxable base formula
532 000
– 30 000
– 253 333
= 248,667 ฿ taxable income
3. Applying a progressive scale
| Income | Bid |
| 0-150 000 ฿ | 0% |
| 150 001-300 000 ฿ | 5% |
| 300 001-500 000 ฿ | 10% |
| 500 001-750 000 ฿ | 15% |
| 750 001-1 000 000 ฿ | 20% |
| 1 000 001-2 000 000 ฿ | 25% |
| 2 000 001-4 000 000 ฿ | 30% |
| Over 4,000,000 ฿ | 35% |
Income of 248,667 ฿ falls within the range:
0-150 000-0% / 150 001-300 000-5%
Calculating the tax:
- first part (0-150,000) – 0%
- second part (248,667-150,000 = 98,667) →
98 667 × 5% = 4 933 ฿
TOTAL TAX
Settlement tax: 4,933 ฿
Initial withholding on Form PND3: 26,600 ฿
Amount to be refunded: 26,600-4,933 = 21,667 ฿
This amount can be:
– return it to your bank account, or
– offset against next year’s tax bill.
TOTAL
At 7.6 million ฿, Leasehold and 7% guaranteed income:
- Annual income: 532,000 ฿
- Real tax: 4 933 ฿
- Refundable: 21,667 ฿
6. INHERITANCE TAX
If the value of the property is up to 100 million ฿ – no tax is charged.
Above 100 million ฿ – rate of 5-10%.
7. Tabien Baan (house book)
Tabien Baan is an official booklet from the municipality that records the address of a house or apartment and the people registered at that address. Important: This document does not prove ownership.
Types of house books
- Blue (Blue Tabien Baan) – for Thai citizens.
- Yellow (Yellow Tabien Baan) is for foreigners.
How it works for foreigners
- If a foreigner owns a house (without land) or an apartment in a condo, he/she is issued a Blue House Book, which only shows the address of the property.
- You can put your name in if:
- has a long-term visa,
- the person actually lives at that address,
- he’s the owner of the property.
- Once the foreign owner is registered, the Blue Book is exchanged for a Yellow Book and his name is entered there.
Advantages of the Yellow House Book
- Property tax exemption for properties worth up to ฿ 10 million (subject to permanent residence).
- Exemption from Specific Business Tax on the sale of an apartment if the owner has been registered in the Yellow Book for at least a year.
Conclusion
Thailand’s tax system is one of the most transparent and easy to understand in Asia.
For the buyer, it is only important to understand what charges arise at each stage: buying, owning, selling or renting.
As an experienced agency, we will help you calculate all taxes for a particular object, check the documents, explain the terms of ownership, tell you about benefits and tips on how to optimize costs.
