Property tax in Thailand (land and building tax) depends on how the property is used.
Base rates:
- 0.02% — residential use
- 0.3% — commercial use
Let’s review how the tax is calculated for properties valued at 10 million and 40 million THB.
1. Freehold + Yellow House Book
If the owner has a yellow house book, the property is considered their primary residence.
Benefit: tax exemption on value up to 10 million THB
- 10 million THB → 0 THB tax
- 40 million THB → (40M − 10M) × 0.02% = 6,000 THB
2. Freehold, Personal Use (No Yellow Book)
No exemption applies. Rate — 0.02% on the full value.
- 10 million THB → 2,000 THB
- 40 million THB → 8,000 THB
3. Freehold, Rental Use
The property is treated as a commercial asset.
Rate — 0.3%
- 10 million THB → 30,000 THB
- 40 million THB → 120,000 THB
4. Leasehold — Any Type of Use
Tax is calculated at the commercial rate — 0.3%
Formally, the landowner (developer) pays the tax,
but in practice it is almost always passed on to the tenant.
- 10 million THB → 30,000 THB
- 40 million THB → 120,000 THB
How Usage Type Is Determined
Tax authorities and local administration rely on actual indicators:
Leasehold
- ownership is held by a legal entity → automatically treated as commercial use
Multiple Freehold Properties
If one owner has several units, authorities may:
- classify some as investment properties
- apply the 0.3% rate
If all properties are used for personal purposes,
you may request a reassessment with supporting documents.
Yellow House Book and Rental Use
If a property is:
- registered as residential
- but actually rented out
tax may still be charged at 0.02%.
In this case, it is advisable to:
- notify the authorities
- recalculate the tax correctly
Otherwise, there is a risk of:
- additional tax assessments
- penalties and interest
Conclusion
The amount of tax depends not only on the ownership structure but also on the actual use of the property.
It is important to:
- correctly determine the property status
- monitor tax assessments
- request reassessment if necessary
Recommendation for Agencies and Developers
It is advisable to inform clients in advance about tax obligations and document this properly to reduce the risk of future claims.
Author: Alexandra Agapitova.
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