Find out more about the various property taxes that you will need to consider when buying a property in Thailand.
In addition to the price of the property, it is also crucial to factor in the amount you will need to pay as property tax, when planning your budget for your dream home. For overseas investors, the country’s property tax structure can be a huge influence in your choice of country to buy your investment property in.
It is important to have a complete understanding of all the property taxes you will be expected to pay when you buy a property, regardless of whether it is for investment or not. They chip away at your returns on investment and can leave you with a larger-than-expected bill at the end of the year. If you are planning to earn a rental income off your investment property, you should be prepared to pay an income tax on that income as well.
We take a look at Thailand’s property tax structure for home buyers in 2020.
Specific Business Tax
A levy of 3.3% of the registered sale price called the Specific Business Tax is imposed upon the sale of your property. This amount compromises the business tax at 3% and the municipal tax of 10% assessed on the amount of the business tax, making up 3.3% in all. It is only applicable if the seller has owned the property for less than five years. If the seller is charged the Specific Business Tax, they are exempt from paying stamp duty on their property.
If the property has been owned for 5 or more years, a stamp duty of 0.5% over the registered value will be imposed on the sale. Stamp duty is only applicable for sellers who are not charged the Specific Business Tax.
If the seller is a company, the withholding tax is fixed at 1.1% of Thailand’s Land Department’s official appraised value or registered sale value of the property, whichever is higher. If the seller is an individual (e.g. resale), the withholding tax is charged at a progressive rate based on the appraised value of the property and the duration of the seller’s ownership.
Rental Income Tax
For overseas investors who are planning to rent out their investment property, it is important to note that they will be charged a personal income tax on their rental income. The personal tax income structure in Thailand is as follows:
Source: Revenue Department of Thailand
Compared to other countries in the region, Thailand’s tax structure is generally more favourable to investors who are looking for good returns on investment without significant erosion to their capital gains.
Many countries require their residents to declare any overseas income received in their home country, which can be subject to further taxation. As such, buyers should be fully aware of the tax structures in their own countries as well, when it comes to overseas property ownership and rental income. Speak to our agents for more information and clarification on owning Thai property.
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