Real Estate in Thailand: Essential Tax Information

Buying property in Thailand is exciting, but the numbers behind the deal deserve just as much attention as the sea view or the city skyline. Government charges, taxes, and ongoing expenses can add up, and they follow rules that differ from many other countries. With a clear picture of what gets charged, by whom, and when, buyers can budget cleanly and avoid surprises at the Land Office. In today’s competitive market, potential buyers are keeping an eye on property prices while also scouting attractive investment opportunities in real estate in Thailand.

Below is a practical guide that unpacks one-time transfer costs, annual taxes, and recurring ownership fees, with examples and a quick checklist you can use before signing a contract.

How Thailand Calculates Prices for Tax

The Land Office calculates taxes and fees using the greater of:

• The registered price on the sale agreement, or
• The official appraised value issued by the Land Department

That official valuation is not a market appraisal. It is a government schedule. If your purchase price is lower than the official value, taxes are still calculated on the higher official number. This can affect overall property prices and evaluation when considering real estate in thailand.

This point matters for budgeting and for negotiations over who pays which items on transfer day, helping to solidify clear ownership and support sound investment decisions in real estate in thailand.

One-Time Government Charges at Transfer

These are the main charges you will encounter when the title changes hands at the Land Office. They apply to freehold transfers of houses, land, and condominium units. Leasehold involves a different set of fees covered later.

1) Transfer Fee

• Rate: 2% of the official appraised value
• Usual practice: Often split 50-50 between buyer and seller for private resales, but fully paid by the buyer on developer sales. This is negotiable and should be specified in the sale and purchase agreement.

2) Specific Business Tax

• Rate: 3.3% of the official appraised value or the registered price, whichever is higher. The 3.3% consists of a 3% tax plus a 10% municipal surcharge on that tax.
• Who pays: Typically, the seller.
• When it applies:
  • If the seller is a company, or
  • If the seller is an individual who has owned the property for less than 5 years
• Common exemptions:
  • An individual selling a primary residence may qualify for an exemption if the owner has been registered on the house registration at that address for at least one year. Conditions are specific, so sellers should check documentation at the district office.

If the Specific Business Tax applies, stamp duty does not apply on the transfer.

3) Stamp Duty on Transfer

• Rate: .5% of the official appraised value or registered price, whichever is higher
• Who pays: Usually, the seller
• When it applies: When Specific Business Tax does not apply

4) Withholding Tax on the Sale

• Collected by the Land Office on the day of transfer and normally paid by the seller.
• For individual sellers:
  • Calculated using the official appraised value and a notional income method
  • The Land Office applies standard deductions based on years of ownership and then applies progressive personal income tax rates
  • Effective rates often land in the 1 to 3% range, but can vary based on holding period and the assessed value
• For company sellers:
  • 1% of the higher of the official appraised value or registered price is withheld. The company credits this against corporate income tax.

5) Mortgage Registration

• Fee: 1% of the loan amount
• Stamp duty on the mortgage instrument: .05% of the loan amount
• Caps: The registration fee is capped at 200,000 THB per mortgage
• Who pays: The borrower

6) Lease Registration (for leasehold)

• Lease registration fee: 1% of the total rent over the lease term
• Stamp duty on lease: .1% of the total rent over the lease term
• Maximum lease term: Up to 30 years per registration, with options to renew by a new instrument

Summary Table: Common Transfer Charges

Charge	Standard Rate	Typical Payer	Applies When
Transfer fee	2% of official appraised value	Negotiable, often split or buyer	All freehold transfers
Specific Business Tax	3.3%	Seller	Corporate sellers, or individuals selling within 5 years, unless primary residence exemption
Stamp duty on transfer	.5%	Seller	Only when Specific Business Tax does not apply
Withholding tax (individual seller)	Progressive, based on assessed value and years held	Seller	All individual seller transfers
Withholding tax (company seller)	1% of higher of assessed or registered price	Seller	All company seller transfers
Mortgage registration	1% of loan amount, capped at 200,000 THB	Buyer/borrower	When registering a mortgage
Mortgage stamp duty	.05% of loan amount	Buyer/borrower	When registering a mortgage
Lease registration	1% of total rent	Lessee/lessor negotiable	Leasehold registration at Land Office
Lease stamp duty	.1% of total rent	Lessee/lessor negotiable	Leasehold registration at Land Office

Rates can be adjusted by cabinet notification for policy reasons, sometimes for limited property price bands or limited time. Always verify current rates before transfer.

Who Usually Pays What

Market practice varies by location and by whether you are buying from a developer or a private seller.

• Developer sales
  • Buyers often pay the 2% transfer fee and mortgage costs.
  • Developers sometimes run promotions that absorb part or all of the transfer fee.
  • Sinking fund and initial common area fees are paid by the buyer.
• Private resale
  • Transfer fee is often shared.
  • Seller covers Specific Business Tax or stamp duty, and withholding tax.
  • Everything is negotiable, so get it in writing in the sale contract.

These arrangements affect not only the final cost but also the overall investment in real estate in Thailand, ensuring that property prices remain competitive and transparent for all parties involved in real estate and property transactions.

Worked Examples

Numbers below are illustrative. The Land Office will use its own assessed values and formulas.

Example 1: Resale condominium, 8,000,000 THB, no mortgage

Assumptions:

• Official appraised value is 7,600,000 THB
• Registered price is agreed at 8,000,000 THB
• Seller is an individual and has owned it for 6 years
• Buyer and seller agree to split the transfer fee

Calculation base: the higher number is 8,000,000 THB.

• Transfer fee: 2% of 8,000,000 = 160,000 THB. Split 50-50, so buyer pays 80,000 THB, seller pays 80,000 THB.
• Specific Business Tax: not applicable since ownership exceeds 5 years.
• Stamp duty: .5% of 8,000,000 = 40,000 THB. Seller pays.
• Withholding tax: based on the Land Office’s notional income method for individuals. Assume an effective rate around 1.5% for this scenario. Estimated 120,000 THB. Seller pays.

Buyer’s immediate government costs: 80,000 THB
Seller’s government costs: 80,000 + 40,000 + 120,000 = 240,000 THB

Example 2: Villa sale, 20,000,000 THB, held less than 5 years

Assumptions:

• Official appraised value equals the registered price at 20,000,000 THB
• Seller is an individual who does not qualify for the primary residence exemption
• No mortgage
• Transfer fee: 2% of 20,000,000 = 400,000 THB. Negotiable split.
• Specific Business Tax: 3.3% of 20,000,000 = 660,000 THB. Seller pays.
• Stamp duty: not charged because Specific Business Tax applies.
• Withholding tax: calculated on the assessed value with a short ownership period. Effective 1 to 3% is common; assume 2% for this example, 400,000 THB. Seller pays.

If parties split the transfer fee, buyer pays 200,000 THB. Seller’s total would be 200,000 + 660,000 + 400,000 = 1,260,000 THB.

Example 3: Leasehold townhouse, 3-year lease at 60,000 THB per month

Total rent over the term: 60,000 x 36 = 2,160,000 THB

• Lease registration fee: 1% of 2,160,000 = 21,600 THB
• Lease stamp duty: .1% of 2,160,000 = 2,160 THB

Parties decide who pays what. Some landlords pay the registration fee and ask the tenant to cover the stamp duty, while others split both.

Annual Ownership Taxes: Land and Building Tax

Thailand’s Land and Building Tax applies each year to land, houses, and condominiums. The local authority issues the bill, usually in the first quarter.

• Property type categories: agricultural, residential, commercial, and unused.
• Rates: published in brackets, with residential rates topping out far below the cap set in the law.
• Primary residence relief for individuals:
  • A house on owned land used as the owner’s primary residence may be exempt on an assessed value up to 50 million THB.
  • A condominium used as the owner’s primary residence may be exempt up to 10 million THB.
  • Relief requires the owner to be registered on the house registration (Tabien Baan) at that address.
• Second homes or rental units pay the residential rate without the primary residence exemption.
• Unused land or buildings face higher rates that increase every three years if still unused, up to a ceiling.

Illustration:

• A condo assessed at 8 million THB and used as the owner’s primary residence would commonly fall under the exemption and pay no annual Land and Building Tax.
• The same condo used as a rental may be taxed at around .02% to .1% depending on local brackets and policy, which would be 1,600 to 8,000 THB per year at those sample rates.

Local authorities can apply temporary discounts or national relief measures for a given tax year, so check the notice that arrives with your bill.

Ongoing Condo and Villa Expenses

These are not taxes, but they affect annual cash outlays and should be budgeted from day one.

• Common area fees for condominiums:
  • Charged per square meter per month.
  • Typical bands in Bangkok: 40 to 100 THB per sqm per month, depending on building grade and amenities.
  • Collected monthly, quarterly, or annually in advance.
• Sinking fund:
  • One-time payment at transfer to fund long-term capital works.
  • Common range: 500 to 1,500 THB per sqm.
• Property management or estate fees for villas:
  • Private estates charge monthly fees for security, roads, landscaping, and shared facilities.
• Utilities and deposits:
  • Electricity, water, and internet deposits when setting up service.
  • Meter transfer fees when buying resale units.
• Insurance:
  • Building insurance is often included in condo common costs for the structure, while contents insurance is up to the unit owner.
  • Freehold houses should carry building insurance based on replacement cost.

These ongoing expenses also play a role in the overall real estate and property investment landscape in Thailand, as competitive property prices and modern amenities attract both buyers and seasoned investors looking for sustainable ownership and long-term investment returns.

Taxes on Rental Income

If you plan to rent out the property, factor in Thai income tax rules.

• Individuals renting out residential property:
  • Rental income is taxable at personal income tax rates.
  • A standard expense deduction is available for building rental. A common rate applied is 30% of gross rent, with tax applied to the remaining 70%.
  • You can choose to claim actual expenses instead if they are documented and higher than the standard deduction.
• Withholding by corporate tenants:
  • If your tenant is a company, it must withhold 5% of the rent and pay this to the Revenue Department.
  • The withheld amount becomes a tax credit when you file your annual return.
• VAT:
  • Residential rental by individuals is outside the VAT system.
  • Commercial property rental may be subject to VAT if the landlord is VAT registered.
• Local tax interaction:
  • Land and Building Tax is payable by the owner even if the property is rented. This replaced the older rental-based local tax.

If you rent frequently or scale into several units, seek tax advice to structure filings and deductions correctly, as a sound investment strategy in real estate in thailand depends on understanding the interplay of rental income and ownership costs.

Foreign Buyers: Funds and Formalities

Foreigners can own condominium units freehold within the foreign quota and can hold long leases on land and houses. When buying a freehold condo, the Land Office requires proof that foreign currency was remitted from abroad for the purchase.

• Foreign Exchange Transaction Form (FET)
  • The receiving bank in Thailand issues this document when funds arrive from overseas in foreign currency and are converted to Thai baht.
  • The buyer’s name on the FET must match the buyer’s name on the title deed.
  • The purpose of remittance should reference the condo purchase.
• Bank fees and timing:
  • International transfer fees and exchange spreads add to the total cost.
  • Send funds early enough so the FET is ready on transfer day.
• Using Thai baht from a Thai account without an FET letter can cause issues for foreigners buying freehold condos. Keeping the banking trail clean is crucial for both legal compliance and smooth ownership transfer.

Foreigners looking into real estate in thailand often note that the clarity in ownership processes and competitive property prices make for a robust investment atmosphere in the country.

Other Events That Trigger Taxes or Fees

A few items are often overlooked:

• Inheritance and gifts:
  • Inheritance tax applies when a beneficiary receives assets worth more than 100 million THB, including real estate located in Thailand.
  • Rates differ for lineal heirs and others.
  • Foreigners can inherit condominiums, subject to the foreign ownership quota and currency remittance requirements at the time of transfer.
• Title changes within families:
  • Transfers between family members may attract a transfer fee and stamp duty or Specific Business Tax, depending on circumstances.
  • Planning the paperwork first can help avoid paying more than needed.
• Notarization and translations:
  • Documents in other languages require certified translations for Land Office use.
  • Notary and translation fees vary by language and complexity.

Practical Budgeting Tips

• Write down who pays what:
  • Confirm the split for transfer fee, taxes, and any broker commission in the sale and purchase agreement.
• Ask the Land Office or your lawyer for the current official appraised value:
  • Base your tax estimates on the assessed value to avoid underbudgeting.
• Check the seller’s holding period and housing registration status:
  • This affects whether the Specific Business Tax applies and influences the calculation of the withholding tax.
• Prepare for mortgage fees:
  • Add 1% mortgage registration and .05% mortgage stamp duty to your financing budget.
• Condo buyers should ask for:
  • Sinking fund rate and balance.
  • Current common fees and any approved increases.
  • Any special assessments planned in the next 12 to 24 months
• Don’t forget post-completion costs:
  • Utility deposits, minor renovations, furniture, insurance, and moving costs often exceed expectations and should be factored into the overall investment in real estate.

Quick Checklist Before You Sign

• Property type and title:
  • Freehold condo, house on Chanote land, or leasehold?
  • Any encumbrances shown on the back of the title deed?
• Official appraised value:
  • Obtain the figure from the Land Office or through your lawyer.
• Tax position of the seller:
  • Company or individual.
  • Ownership period and primary residence status.
• Allocation of transfer costs:
  • Transfer fee split.
  • Who pays the Specific Business Tax (SBT) or stamp duty
  • Who pays the withholding tax at transfer.
• Financing:
  • Mortgage terms, registration fee, and mortgage stamp duty.
• Annual costs:
  • Land and Building Tax estimate after any primary residence relief.
  • Common fees and sinking fund for condos.
  • Estate management fees for villas.
• Rental plan:
  • Expected rent, tax on rental income, and whether a corporate tenant will withhold 5%.
• Foreign buyer paperwork:
  • FET letter and bank timing for condo purchases.
  • Passport name matching all documents.

Getting familiar with these numbers and processes puts you in a stronger position at the negotiation table and at the Land Office counter. With a clean cost model and the right documents, the only surprise left should be how quickly the keys land in your hand.

Market Insights for Real Estate in Thailand

Real estate in thailand continues to evolve, offering high-quality real estate in thailand options for both urban and rural buyers. Investors are finding that real estate in thailand provides stability and potential for long-term growth. With competitive property prices, real estate in thailand becomes an attractive option. Moreover, real estate in thailand benefits from government policies that foster transparency.

For foreigners and domestic buyers alike, real estate in Thailand presents diverse investment opportunities in the thriving real estate market in Thailand. Many renovation projects and development plans further boost real estate in Thailand interest of savvy investors. Strategic locations in real estate in Thailand often come with modern amenities and infrastructure, and state-of-the-art amenities, such as swimming pools and fitness centers, boost the appeal further. As a result, real estate in Thailand remains a hot topic among global investment circles.

Experienced investors focus on real estate in Thailand due to clear ownership rules and well-established real estate legal frameworks in Thailand. Numerous investment opportunities in Thailand also highlight how real estate in Thailand offers value and flexibility in transactions. Digital platforms make it easier to compare property prices and other real estate metrics in Thailand in today’s market, while locals and foreigners alike are increasingly considering local amenities as key factors for a comfortable lifestyle. Therefore, real estate in Thailand stands out as a cornerstone of the region’s economy, offering secure ownership and attractive investment prospects.

Foreigners interested in investing in property in Thailand should note that detailed market research and professional advice can help navigate the legal landscape and unlock rewarding investment. With attractive property prices and a broad array of investment opportunities in real estate, both first-time buyers and seasoned investors find that clear ownership, competitive investment options, and modern amenities are essential for success in Thailand’s vibrant market.

By keeping these insights in mind and carefully reviewing each cost element, you can approach your real estate and property investment in Thailand with confidence, ensuring that every aspect, from investment to long-term ownership,p aligns with your financial goals.