Thinking of investing in real estate in Thailand as a foreigner? From purchase fees to rental income taxation and inheritance, understanding the local tax system is key to making a smart and profitable investment. Fortunately, Thailand remains highly attractive for real estate investors not only because of its property prices and rental yields, but also thanks to its relatively light and straightforward tax structure.
Table of contents:
- Taxes and fees when buying a property in Thailand.
- Annual Property Tax for Owners (Since 2020).
- Taxes on Rental Income from Properties in Thailand.
- Capital Gains Tax on Property Sales in Thailand.
- Inheritance Tax on Real Estate in Thailand.
Property Taxes and Fees When Buying Real Estate in Thailand
Transfer of Ownership at the Land Office
Any property transaction in Thailand must be completed at the Land Office, where ownership is formally transferred. This process involves several taxes and government fees, based on the Land Department appraised value or the declared sale price:
- Transfer Fee: 2% of the Land Department appraised value of the property.
- Specific Business Tax: 3.3% of the Land Department appraised value of the property or the selling price – whichever is higher (only applies if the property is sold within 5 years of acquisition).
- Stamp Duty: 0.5% of the Land Department appraised value of the property (only applies if the Specific Business Tax is not paid).
- Withholding Tax: 1% or more (depends on the seller’s personal income tax situation and ownership duration).
How Are These Fees and Taxes Shared Between Seller and Buyer?
When purchasing real estate in Thailand, the responsibility for taxes and fees varies depending on whether the property is new from a developer or resale on the secondary market.
- New Developments: In most cases, the buyer is only responsible for half of the 2% transfer fee (i.e., 1% of the Land Department appraised value of the property). All other taxes and administrative costs are usually covered by the developer.
- Resale Properties: There are no fixed legal rules for cost sharing. Instead, it’s subject to negotiation between buyer and seller. However, the industry norm is for the transfer and registration fees to be shared equally.
Regardless of the situation, it is essential that all taxes, fees, and their respective shares are clearly outlined in the Sale and Purchase Agreement (SPA) to avoid disputes or surprises during the transfer process.
📝 Tip: Work with a trusted real estate agent or legal advisor to negotiate fee responsibilities upfront and document them properly in your contract.
Annual Property Tax for Owners (Since 2020)
Since January 1st, 2020, Thailand has introduced a new annual property tax based on land use and property value. This applies to all types of real estate, including residential, commercial, and agricultural properties.
Tax Rates for Residential Properties
| Property Type | Appraised Value | Tax Rate |
|---|---|---|
| Primary Residence | Up to ฿10M | Exempt |
| Primary Residence | Over ฿10M | 0.02% on excess only |
| Secondary/Investment Home | Any Value | 0.02% – 0.1% |
Example: If your home is valued at ฿12M and registered as your main residence, the first ฿10M is tax-exempt, and only the remaining ฿2M is taxed at 0.02% = ฿400/year.
Taxes on Rental Income from Properties in Thailand
If you’re planning to rent out your property, you’ll be subject to income tax on the rental revenue. The tax rate depends on whether you are considered a Thai tax resident or non-resident.
For Thai Tax Residents
Rental income is taxed based on Thailand’s progressive personal income tax rates:
| Annual Income (THB) | Tax Rate |
|---|---|
| 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% |
| Over 5,000,000 | 35% |
Management companies may withhold a 5% tax deposit, which can be claimed against your total annual tax liability.
For Non-Residents
Non-residents are subject to a flat 15% withholding tax on gross rental income. In most cases, this satisfies your tax obligation in Thailand.
✅ Good News: Thailand has Double Taxation Agreements (DTAs) with many countries, so you may not be taxed again on the same income in your home country.
Capital Gains Tax on Property Sales in Thailand
Thailand does not have a capital gains tax in the traditional sense. Instead, profits made from the resale of property are implicitly taxed through the Withholding Tax and possibly the Specific Business Tax, calculated during the transfer process.
🔁 See section: Property Taxes When Buying Real Estate for exact details of applicable taxes upon resale.
Inheritance Tax on Real Estate in Thailand
Thailand introduced an inheritance tax in 2016. However, the thresholds remain generous and most heirs won’t have to pay any inheritance tax at all.
Tax Rates and Exemptions
- No tax if total inherited assets are less than ฿100 million.
- 10% tax on value exceeding ฿100M for general heirs.
- 5% tax for direct descendants or spouses.
Transfer Fees for Inherited Property
Regardless of inheritance tax, the transfer of ownership at the Land Office incurs fees:
- 0.5% if the heir is a spouse or descendant.
- 2% if the heir is neither.
Final Thoughts on property Taxes in Thailand for Foreigners
Thailand’s real estate tax system is simple, transparent, and investor-friendly, especially compared to many Western countries. Whether you’re looking to buy a vacation home, earn rental income, or leave a legacy for your heirs, Thailand offers a fiscally attractive environment for foreign property buyers.
Need Help Understanding Taxes for Your Thailand Property?
At Relife Properties, we help foreign buyers navigate the legal and tax framework of Thai real estate. Contact us for a free consultation or visit our Legal Blog for more resources.
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