Building Tax and Property Tax in Thailand
The introduction of legislation on Building and property taxes in Thailand in 2020 has brought about changes for all property owners in Phuket and nationwide.
The primary objectives of this legislation were to address income inequality issues, effectively increase tax earnings, and improve the efficiency of property tax collection procedures.
This will be useful knowledge if you are a foreigner looking to buy or own property in Phuket, Thailand.
Building Tax and Property Tax in Thailand Legislation
The traditional way of computing property tax using the evaluated value established locally has been substituted with an approach based on the value of both structures and land determined by the treasury department resulting in a more dependable and transparent process.
Residential properties that used to be exempt from property taxes must now pay taxes well. This change has led to a considerable rise in the amount of revenue collected from property taxes.
Variable Tax Rates Update: Instead of a fixed rate of 12 50%, a sliding scale is now in place, adjusting based on the property’s usage to ensure taxes align with its intended purpose and worth.
Responsibility for property tax collection falls on the district administration of each jurisdiction, known as the tambon.
Property Assessment Values: The values used to assess property for tax purposes are in sync with those utilized for land transfer fees and taxes recorded at the nearby land registry office. This information is revised periodically to mirror the market values as assessed by the finance department, as detailed in the Property Appraisal Act (2019). This modification will lead to property assessment values more aligned with present market conditions.
The Land and Building Tax in Thailand applies to a range of properties such as land parcels and buildings along with condominium units; however, certain exemptions exist for property types as per the provisions of the law.
Below are some aspects to note about properties and exemptions governed by the law:
- Taxable Assets Include Land and Buildings as Condominium Units subject, to taxes based upon their assessed value.
- Certain properties are not liable, for the Land and Building Tax as per exemptions outlined in the regulations – these include properties owned by the entities or utilized by foreign governments, like embassies and consulates and those serving religious purposes among others.
- Residential Property Tax Benefits for Homeowners: Homeowners can take advantage of tax benefits based on their property’s value. The exemptions include the following;
a. Individuals who own both the land and buildings do not have to pay taxes for properties valued at, than 50 million baht.
b. Residential properties worth, than 10 million baht are not subject to taxation for people who own the building and not the land, such, as condominium owners. - Tax Exemption, for Primary Residence Clarification: Remember that the tax exemption for properties only pertains to the residence of the owner, not any other properties they may own or use as second homes, which are subject to taxation based upon their assessed value.
Consider seeking advice from a tax expert or the appropriate authorities to ensure you grasp and follow the Land and Building Tax laws correctly, including any exemptions that may apply. The same goes for when doing due diligence for a property purchase.
Land and Building Tax Rates
In Thailand’s Land and Building Tax system, tax rates vary depending on how the property is used. These rates fall into four categories, each with its maximum rate as of 2020;
- Properties dedicated to agriculture, known as properties, are classified in this group. They are subject to a tax rate of 0…15 percent based on their assessed value.
- Residential properties refer to properties utilized for living purposes, such as condominiums (condos), apartments, and houses. They are recognized as properties in the tax system, where a tax rate of 0․30 percent is applied to the property’s assessed value.
- Nonresidential or nonagricultural properties refer to those used for industrial purposes or residential or farming activities. The tax rate applicable to these properties is set at 1/20th of the property’s assessed value.
- Unoccupied Buildings, properties that are empty or not being used for any purpose are considered properties, in this context.The starting tax rate, for properties is set at 1 2%. Moreover the tax rate goes up incrementally every three years with a rise of 0 5% capping at the rate of 1%.
These rates represent the rates, and the specific tax amount could vary depending upon the property’s assessed value as determined by the treasury department in accordance with the Property Appraisal Act.
We recommend seeking advice from a tax expert or referring to the guidelines and regulations issued by the Thai authorities for precise and current details on tax rates and possible changes.
Meet the Author
With extensive expertise in Phuket’s property market and Thai property laws, as well as deep connections with local developers, Nuno co-founded one of the largest real estate agencies in the region. Recently, he launched his own venture, Storm Real Estate, specializing in a carefully curated selection of properties that meet his high standards. Unlike larger agencies where frequent staff turnover can disrupt client relationships, Nuno is committed to offering a stable, one-on-one experience with himself or a member of his team of experienced property consultants, from initial consultation through purchase and beyond. By prioritizing quality over quantity, he ensures that each client’s unique needs and budget are met, making dream homes a reality.
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Do not hesitate to contact us if you have any further questions on the subject, or if you would like to know more about property in Phuket in general.
