An In-depth Guide to Real Estate Taxation in Thailand in 2025

In 2025, Thailand's property tax regulations have seen several updates aimed at stimulating market activity and clarifying taxation for both local and international real estate investors. Here's a detailed overview of the key property taxes and relevant updates:

1. Property Transfer Fees

• Standard Rate: Traditionally set at 2%, the property transfer fee has been significantly reduced to 0.01% for properties valued under THB 3 million. This reduction extends the opportunity to stimulate real estate transactions.

2. Stamp Duty

• Rate: Set at 0.5% of the sale price or appraised value, whichever is higher. Applies to property transactions not subject to the Specific Business Tax (SBT).

3. Land and Building Tax

• Residential Use: Owners pay between 0.02% and 0.1% of appraised value. The first THB 50 million is exempt for primary residences.
• Commercial Use: Tax is set between 0.3% and 1.2% based on appraised value.
• Agricultural Use: First THB 50 million exempt, taxed up to 0.1% thereafter.

4. Capital Gains Tax

• For Foreign Sellers: Withholding tax is either 1% of the declared sale price or the applicable personal income tax rate.
• Corporate Sellers: Subject to a 20% corporate income tax on profits from property transactions.

5. Rental Income Tax

• Individual Landlords: Taxed at progressive rates ranging from 5% to 35%.
• Withholding Tax: 5% when tenants are corporate entities.
• Corporate Landlords: Pay a corporate income tax of 20%.

6. Inheritance and Gift Tax

• Inheritance Tax: Imposed at 5% on estates over THB 100 million for direct heirs, and 10% for others.
• Gift Tax: Applied to real estate gifts exceeding THB 20 million per year at 5%, except between direct family members.

7. Tax Strategies for Foreign Investors

• Tax Optimization: Foreign investors may utilize legal structures to reduce liabilities, such as obtaining BOI (Board of Investment) promotions for tax exemptions.
• Deductions and Exemptions: Leveraging deductions for mortgage interest and property maintenance can also help reduce tax burdens.

8. Payment and Compliance

• Payment Deadlines: Annual taxes are typically due by April 30. The government has granted a grace period for 2025, moving the initial payment deadline to June.
• Penalties for Late Payment: Includes surcharges of up to 40% and an additional 1% monthly interest on unpaid amounts.

These tax updates are designed to enhance clarity, increase compliance, and encourage real estate investments in Thailand. Investors should stay informed of these changes and consider professional advice to optimize their tax strategies.