The Ultimate Guide to Property Law and Taxes for Property Buyers in Thailand

Under Thai property law, foreigners can own a condominium freehold in their own name, within each building’s 49% foreign quota, but cannot own land directly. Land is held instead through a Thai company or a leasehold. Buying triggers transfer fees and taxes — a 2% transfer fee, stamp duty or specific business tax, withholding tax, plus annual property tax — calculated on the government-appraised value.

What Is the Definition of a Thai Condo According to Thai Property Law?

According to the Thai Condominium Act of 1979, a condominium is defined as a residential building that allows for freehold ownership of units within the property and joint ownership in common areas. You can individually own condominiums registered with the land department under the Condominium Act and receive a title deed (Chanote).

Property Ownership Amendment for Foreigners in Thailand

Under section 19 of the 2008 amendment to the Condominium Act, foreigners can buy and gain freehold ownership of condos. However, this bit of Thai real estate law states that the total floor space of any given condominium building owned by foreigners cannot exceed 49%. The remaining 51% can only be purchased by Thai citizens.

Are Foreigners Allowed To Buy Property in Thailand?

Yes, foreigners are allowed to have freehold ownership of a Thai title deed for condominiums in Thailand and can indirectly own landed properties such as townhouses, houses, and villas through Thai companies or leasehold structures. New buyers can start with our first-home buying guide or our guide to buying a condo in Bangkok. Owners can later cut costs by refinancing their home loan.

This exception, as stated in section 96 of the Land Code Act, is limited to 1 rai (1,600 square meters or 400 square wah or 0.3953 acre or 17,222 square feet) of land and must be accompanied by an investment in local Thai qualified assets of at least 40 million Thai baht from abroad for a period of five years and such foreign individuals will be granted the privilege to acquire a land plot of up to 400 square wah. In some cases, the Board of Investment may also grant other exceptions.

What Is the Difference Between Freehold and Leasehold Property Ownership?

The difference between freehold and leasehold property ownership is that freehold owners typically have full, permanent rights to the building and land in question. This means no restrictions on transfers or modifications to the property. Freehold property is also better for resale and lower tax costs overall.

Leasehold owners, on the other hand, sign a contract for a limited period and normally have limited rights. When purchasing leasehold rights to a property, it’s important to consider things like transfer clauses, the property’s valuation, and the lease period.

What Are the Legal Restrictions on Foreigners Buying Real Estate in Thailand?

The legal restrictions on foreigners buying property in Thailand are that they cannot own the land and houses, townhouses, or villas, and are instead limited to condominiums as the land is owned and managed by a Thai citizen.

However, foreigners have options for land acquisition. The most common is setting up a Thai limited company to own the land on your behalf. Another is to enter into a long term leasehold with the landowner.

What Is the Simplest Method for Foreigners To Buy Land, Houses, Townhouses, or Villas?

The simplest method for foreigners to buy land, houses, townhouses, or villas in Thailand is to go through setting up a local Thai company. It can even be your own company registered in Thailand, but Thai citizens must make up at least 51% of the shareholders.

The Most Important Things To Know When Investing in Thai Real Estate

Before getting started with Thai real estate investment there are several things to know:

• Learn your rights according to real estate law in Thailand, preferably with a lawyer.
• Visit the land department and get any information you can on the property.
• Search and investigate the seller.
• Carefully review the Agreement of Purchase and Sale which includes things like details of the unit and the agreed price.
• There are several documents to gather for the house registration (Tabian Baan), which registers your residence in the condo you purchased and potentially helps reduce your taxes when selling the condo in the future.
• The seller must provide a letter of guarantee from the Juristic Office (Condo Building Management) stating 51% Thai ownership, and guarantee of no outstanding fees.
• Be prepared to pay condo maintenance fees annually and taxes on the sale of the property.

What Documents Are Required for Transferring Property Ownership at the Land Department?

When transferring ownership at the land department, you’ll need the following (see our full step-by-step guide to transferring property ownership):

• A signed sale and purchase agreement.
• Title deed.
• Debt-Free Certificate.
• Guarantee that the floor space of the complex is 51% Thai-owned.
• Copies of passports or IDs of buyer and seller and immigration entry stamps of foreign parties.
• A Foreign Exchange Transaction (FET) form for foreigners – non residents.

What Taxes Are Involved During a Real Estate Ownership Transfer in Thailand?

According to the Land and Building Tax Act, there are 4 main taxes involved with real estate ownership transfers in Thailand (see our full breakdown of the taxes on a property transaction):

• Special Business Tax (SBT). A 3.3% levy on the actual sale price or appraised value (official estimated price) – whichever is higher at the time or registering the transfer – applied to landlords who sell a property within 5 years of acquiring it. Or, if the owner shows proof of primary residence and his name is registered in the yellow/blue House Registration book (Tabian Baan) for a period not less than 1 year.
• Stamp duty. Taxation at 0.5% of the property’s value that’s applied in the absence of a business tax.
• Transfer fees. 2% of an official estimated price.
• Withholding tax. 1% of the appraised or sales value of the property (whichever is higher) for companies and a progressive rate for individual sellers based on the appraised value of the property, income tax levels and length of time the property was owned by the seller.

The government periodically reduces transfer and mortgage fees to stimulate the market. In Thailand, property transfer taxes are based on official estimated prices, which may not reflect market prices. Because of this, the individual seller may benefit.

However, the government has tried to ensure that estimates more accurately reflect market value since 2022 via a different method of valuation, especially in the case of condominiums.

What Condo Fees Are Charged by the Condominium Juristic Office?

A condominium juristic office generally charges yearly maintenance and management fees for each unit based on square meter size of ownership. These fees go toward things like security fees, cleaning, and elevator maintenance. There’s also a one-time ‘sinking fund’ based on the unit size and paid upon purchasing the unit. This goes toward larger developments and repairs of the building.

Is There an Annual Property Tax for Foreigners in Thailand?

Yes, there is an annual property tax for foreigners and locals in Thailand, that was introduced via the 2020 Land and Building Tax Act. For residential properties, the rate is set at 0.3% of the appraised value (re-evaluated every four years) of property owned on January 1st and is payable from April of the same year.

Is There an Inheritance Tax for Foreign Property Owners in Thailand?

Yes, according to the Inheritance Tax Act of 2015 any inheritance amount above 100 million Thai baht is taxable, including property. This is taxed at 5% for family heirs and 10% for anyone else. Spouses are not taxed regardless of value according to Thai inheritance law.

What Are The Property Rental Income Taxes In Thailand?

Property rental income taxes in Thailand fall under the same category as other income or business transactions. However, if a property is owned by the same person or persons who occupy it, the tax is not applied. Because of this, the total amount is highly variable, based on personal income tax (PIT) level and taking various deductions into account.

Since owners don’t pay House and Land tax on rental income from furniture and services, it’s possible to reduce this tax by taking the total rent and spreading it between that and rent for furniture and/or services.

In the case of companies, tax is unavoidable as this is considered commercial use. The rate is 12.5% of the property’s actual or estimated annual rental value, whichever is greater. Also, corporate property owners registered for the Value Added Tax (VAT) pay a 7% tax on income from furniture and service.

What Is the Personal Income Tax (PIT) For Foreigners?

The Personal Income Tax (PIT) for foreigners is a percentage fee that’s levied based on your yearly income from all income streams. The base rate is 5% and it goes all the way to 35% for those making over 5,000,000 baht per year.

Private ownership law and taxes in Thailand can seem complicated, but owning a condominium is relatively simple for foreigners. To help make it even easier, consider recruiting the help of PropertySights Real Estate.