As you know, previously, there was no real estate tax in Thailand. But on January 13, 2019, the Thai authorities decided to revise the tax policy on land and buildings ownership, and introduced a new tax, BE2562. Tax is levied on individuals and legal entities who own, or have the right to use real estate in Thailand (land, buildings, condominiums, etc.). The new tax gives the right to local governments to collect taxes on land and buildings from all individuals and legal entities, including foreign citizens and foreign companies.
The tax is introduced from January 1, 2020, and must be paid no later than the end of April each year. The tax value will be calculated based on the cadastral value of the property as determined by the local authorities. Payment is made according to the invoice sent to the address of the location of the property or registration of the owner. The bill is paid at the location of the local administration.
How will the new property tax in Thailand be calculated?
Under the new law, tax rates will be determined by the government annually, separately for each category of real estate. In this case, the tax cannot be higher than the following values:
1. Agricultural land and buildings - 0.15%
2. Residential buildings - 0.3%
3. Commercial real estate objects not intended for permanent residence - 1.2%
4. Real estate objects that are not used (idle) - 1.2%. If the facility has not been used for more than three years,then the tax on it increases by 0.3% every three years, until it reaches its maximum value of 3%.
In 2020, all taxpayers have tax breaks that significantly reduce the tax rate. Some categories of taxpayers are completely exempt from paying tax.
Taxes are exempt from:
- agricultural objects, the cost of which does not exceed 50,000,000 Baht;
- houses with land plots worth up to 50,000,000 Baht, in case this house is the main place of residence.
- apartments / apartments worth up to 10,000,000 Baht, in case these apartments are the main place of residence.
If the cost of housing exceeds the non-taxable one, the tax is calculated for the amount exceeding the specified limits. For example, if you own a villa in Thailand with a value of over 50,000,000 Baht, then the taxable amount will be calculated as follows: property value - 50,000,000 Baht = taxable amount.
Can a foreigner be exempted from property tax?
Yes, it can, if he owns only one property in which he is registered.
How do I register with my property for tax relief?
When purchasing real estate, the new owner, among other documents, receives a blue book in his hands, this is a house book - tabienbaan. This book contains the address of the acquired property, and persons who permanently reside in the property are registered there. Tax relief can be obtained from the entry in this book. But only Thai citizens can be included in this book.
How to register a foreigner?
For this there is a copy of the "blue" house book - the "yellow" house book, any foreign citizen can get a "yellow" book, a prerequisite is the presence of a long-term non-immigration visa. That is, if you do not have a long-term visa, you cannot qualify for tax benefits.
If an individual owns several real estate objects, tax benefits can be obtained only for one of them, in which the registration is made.
Do I need to pay tax if the property is purchased on a leasehold (long-term rental)?
Usually, all taxes on long-term lease (lease) must be paid by the tenant. To clarify this information, see the terms of your contract, concluded at the time of purchase of housing. If these conditions are not spelled out in the contract, contact the landlord or your lawyer to clarify this information.
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