Recently, co-owners of a well-known condominium received property tax bills — with almost all of them being charged at a rate of 0.3% of the apartment’s value.
Why was the tax so high? Let’s take a closer look at when the 0.02% rate applies and when the 0.3% rate applies.
When does the 0.02% rate apply and when does the 0.3% rate apply?
The land and building tax rate is progressive and depends on the value of the property. This article provides the minimum rates for properties valued at up to THB 50 million.
The 0.02% property tax rate applies if:
- You are the owner of the property, meaning that you own the property on a freehold basis.
- You use the apartment for personal purposes — you live in it yourself or it is occupied by members of your family.
A leasehold apartment is owned by the developer, so a rate of 0.3% of the property’s value applies to such a property.
If you rent out the apartment, regardless of the form of ownership — freehold or leasehold — the 0.3% rate applies. This is because the property is being used for commercial purposes.
The apartment was not rented out. Can the rate be reduced from 0.3% to 0.02%?
Yes, if you can prove that you actually lived in the apartment and used it for personal purposes.
The following may be used as supporting evidence:
- photographs;
- your visa and entry stamps into Thailand;
- TM30 registration;
- confirmation from the condominium management that no third parties were residing in the apartment.
If I obtain a yellow house registration book with my name in it, will I pay property tax at the 0.02% rate?
A yellow house registration book confirms the name of the person residing in the apartment, but it does not establish their ownership rights to the property.
If you have a yellow house registration book and use the apartment as your personal residence, the first THB 10 million of the apartment’s value is exempt from property tax.
However, if you have a yellow house registration book but the apartment is rented out, the 0.3% rate applies to the entire value of the apartment.
Property Tax Calculation for an Apartment Worth THB 15 Million
Let’s consider four scenarios.
Scenario 1. You have a yellow house registration book and live in the apartment
The first THB 10 million is exempt from tax.
The remaining THB 5 million is taxed at a rate of 0.02%.
Total tax — THB 1,000 per year.
Scenario 2. You live in your own apartment without a yellow house registration book
The full THB 15 million is taxed at a rate of 0.02%.
Total tax — THB 3,000 per year.
Scenario 3. You rent out the apartment
Regardless of whether you have a yellow house registration book, the full THB 15 million is taxed at a rate of 0.3%.
Total tax — THB 45,000 per year.
Scenario 4. The apartment is held on a leasehold basis
Regardless of whether the apartment is used as a personal residence or rented out, the full THB 15 million is taxed at a rate of 0.3%.
Total tax — THB 45,000 per year.
Conclusion
Having a yellow house registration book can save a maximum of THB 2,000 per year in property tax in the example considered.
At the same time, obtaining a yellow house registration book can be quite difficult. As a rule, a long-term visa, two Thai citizens as witnesses who can confirm that you reside in the apartment, and other documents are required.
Therefore, before applying for a yellow house registration book, it is worth considering whether obtaining one is actually worthwhile in your particular situation.
Author: Alexandra Agapitova.
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