Want to Buy a Property in Bangkok or Chiang Mai. How much Thai Property Tax You Need to Pay?

See there’s no general Thai property tax as such. But in case real properties of Thailand are put to use for commercial purposes, then that must under the Building and Land Tax Act pay a certain rental tax at a rate of 12.5 percent of the annual value or assessed rental value. As for the annual assessed value it depends on the calculation of the appraised value of the land, house or apartment. However, if you lease a property at a rent that is lower than a certain reasonable rent, then the amount is susceptible to adjustment and the lesser could be equally taxed on whatever the rent should have been.

Well, if you are going to be the owner of the property, then it is certainly your responsibility to inform all the local authorities as well as pay building plus land tax prior to the end of February each year. Residences that are owner-occupied are exempted from tax. In case the property or other improvements are company-owned are used for residence by the foreign director, then the company must pay building and land tax, whether or not the company earns anything out of it.

Below mentioned are an overall idea of the property taxes in Thailand (for condo, villa or house) and the way they are calculated.

• Transfer fee: 2% registered value of the property
• Withholding tax: 1% appraised the value of the property. And in case if the seller is an individual, this tax is typically calculated at a progressive rate depending on the property’s appraisal value.
• Stamp duty: 0.5% of the registered value. It is payable only if exempted from the business tax.
• Business tax: 33% of the registered property’s sale value. This is applicable to both the individuals and companies.

Property Tax Thailand and Lease Agreements
Usually, Thai landlords want their tenant to pay the property taxes as a part of the lease agreement. Following is the Thai lease agreement clause;

“The lessee agrees to pay to the Lessor any and all taxes, if any, beginning with taking possession of the property and during the term hereof which may be levied upon or assessed against the property and all interests therein and all improvements and other property thereon, whether belonging to Lessor or Lessee”
Note, in a land lease structure (long-term), it is recommended to have a separate ownership for the foreigner over the structures. These way tax liabilities can be reduced.

Local Thai Land Tax
There is a very small tax on the non-rental property for the undeveloped property (land) imposed upon the individual who owns or possesses the land without any building. In this case, the rate is based on size, classification of land, assessed value, location, and size.