Real Estate Taxation in Thailand for Foreigners Explained (Before You Buy!)

So, you’re thinking about buying property in Thailand? Good call. Thailand’s real estate market is a magnet for foreign investors and expats alike. But before you sign anything, let’s talk taxes. Understanding taxation for foreigner real estate Thailand isn’t just a legal checkbox — it’s the difference between a smooth investment and a financial headache.

Whether you’re investing in a Phuket villa, a Bangkok condo, or a Chiang Mai rental unit, knowing what taxes apply at each stage—purchase, ownership, rental income, resale, or inheritance—can save you from costly surprises. This guide walks you through exactly what to expect, how much it’ll cost, and how to stay compliant while making the most of your investment.

Understanding Thailand’s Real Estate Tax Landscape for Foreign Buyers

Thailand’s tax system is relatively friendly compared to many Western countries. However, that doesn’t mean it’s simple. For foreigners, every stage of property ownership triggers specific taxes and fees:

• When you buy a property (transfer fees, stamp duty)
• While you own it (annual land and building tax)
• When you rent it out (income tax, withholding tax)
• When you sell (withholding tax, business tax)
• Even when you pass away (inheritance tax)

Each of these taxes comes with its own rules, rates, and quirks—especially for non-Thais. The key is knowing what applies to you, when, and how much.

Now, let’s break it down.

Taxes on Purchasing Property in Thailand (For Foreign Buyers)

When it comes to buying property in Thailand, taxes and fees are part of the deal. Even though they might seem small compared to Western countries, they can still impact your total investment cost.

For foreigners, especially those interested in hotspots like Phuket, it’s crucial to understand these transaction costs before signing anything.

Transfer Fee (2% of Appraised Value)

First up: the transfer fee. This is a government levy of 2% on the property’s official appraised value—not the sale price. In most cases, buyers and sellers split this fee (1% each), but it’s negotiable. Always double-check your sales agreement. Don’t assume it’s “standard practice.”

✅ Example: Buying a condo appraised at 10 million THB? Expect a 200,000 THB transfer fee, typically shared between buyer and seller.

Stamp Duty (0.5% — Only Sometimes)

Next is stamp duty, a 0.5% tax on the property’s appraised value or sale price (whichever is higher). But here’s the catch: stamp duty applies only if the Specific Business Tax (SBT) doesn’t. Usually, the seller pays this, but it’s still part of the overall transaction cost equation.

Leasehold Buyers: The 1% Registration Fee

If you’re going for a leasehold property—common for foreigners buying villas—you won’t pay the 2% transfer fee. Instead, there’s a 1% lease registration fee based on the total lease value. This is the typical route for foreign investors who cannot own land outright.

Pro Tip: If you’re unsure whether foreigner can buy property in Thailand freehold or leasehold, you should absolutely read this guide before deciding. It directly impacts your taxes and ownership rights.

VAT on New Properties: Hidden but Included

If you’re buying a newly-built property from a developer, the sale price usually includes 7% VAT. You won’t see this as a separate line item at closing, but you’re paying it nonetheless. It’s baked into the price.

Bottom Line for Buyers

When buying property in Thailand as a foreigner, you should budget for:

• 2% transfer fee (or 1% lease registration fee for leasehold)
• 0.5% stamp duty (depending on the SBT condition)
• 7% VAT (included in new developer prices)

These are unavoidable. The smart move? Factor them into your investment plan upfront.

Annual Property Ownership Taxes (Land and Building Tax)

Once the keys are in your hand and the excitement of the purchase settles, there’s one thing that sticks around every year: the Land and Building Tax. This is Thailand’s annual property tax, and yes — foreigners must pay it too.

Fortunately, the rates are relatively low compared to many countries.

How It Works

The Land and Building Tax applies to all types of property—condominiums, houses, villas, and land—whether owned by Thais or foreigners. The tax is based on the official appraised value of the property, not the price you paid.

For residential properties, here’s a general idea of the progressive tax rates:

Appraised Value (THB)	Approx. Tax Rate
Up to 50 million	0.02%
50–75 million	0.03%
75–100 million	0.05%
Over 100 million	0.1%

✅ Example: Own a condo in Phuket valued at 5 million THB? Expect a yearly tax of around 1,000 THB.

Deadlines & Penalties

The tax must be paid every year by April. Local authorities typically send a notice, but don’t rely on the postman. Late payments incur penalties and interest—small at first, but annoying if left unresolved.

Freehold vs Leasehold? Still Applies.

Even if you own a condo freehold, you’re still liable. If you lease a property (say, a 30-year villa lease), the landowner technically pays, but some contracts will pass the cost on to you. Make sure it’s clear in your lease terms.

For expert insights from local property specialists, read Reloc8 Phuket’s guide on Leasehold vs Freehold in Thailand.

No Exemptions for Foreign Owners

In the past, Thai nationals could get exemptions for primary residences below a certain value—but foreigners do not qualify for this. So yes, you’ll pay something annually even if the amount is modest.

Quick Tip: Think of this tax as maintenance for ownership rights. It’s not a big number—but skipping it can create legal headaches later (especially when you try to sell or transfer the title).

Taxation on Rental Income from Thai Property

So, you’ve bought your dream condo or villa, and now it’s time to generate passive income. Renting out your Thai property can be lucrative—especially in high-demand areas like Phuket or Chiang Mai. But here’s what many foreign landlords overlook: rental income is taxable in Thailand, and the rules are strict.

Rental Income = Personal Income

Thailand treats rental income as personal income, and it’s subject to progressive tax rates ranging from 5% to 35%, depending on your total annual income.

The good news? The law allows for a generous deduction. You can automatically deduct 30% of your rental income to cover maintenance and expenses—no receipts required.

✅ Example: You earn 600,000 THB in rent for the year. Deduct 30% (180,000 THB), and you’re taxed only on the remaining 420,000 THB.

Resident vs Non-Resident Foreigners

Here’s where it gets nuanced.

• If you stay in Thailand more than 180 days/year, you’re a tax resident and must file an annual return covering all your Thai income.
• If you’re a non-resident, you’re taxed only on Thai-sourced income. But even then, rental income must be reported, and it’s subject to withholding tax.

Withholding Tax (Don’t Miss This One)

If your tenant or property manager pays rent to you—especially into an overseas account—they are legally required to withhold 15% of the gross rent and remit it to the Thai Revenue Department.

⚠️ Many foreign landlords aren’t aware of this. But skipping it? That could lead to back taxes, penalties, and legal trouble down the line.

If you’re a tax resident, the withholding rate might be lower (typically 5%), and it can be credited against your annual tax return. But the safest path? Get a Thai Tax ID and file your return properly.

How to Stay Compliant

1. Register for a Tax ID in Thailand (easy process at the Revenue Department).
2. File a personal income tax return annually (Form PND 91).
3. Declare your rental income, apply the 30% deduction, and calculate your tax.
4. Offset any withholding already paid, and either settle the balance or claim a refund.

Pro Tip: If your property is managed by an agency, make sure they’re handling withholding and issuing proper tax receipts. And if you have income from multiple sources or in multiple countries, consider consulting a Thai tax advisor—especially if your home country has a tax treaty with Thailand.

Taxes on Selling Property in Thailand (Capital Gains & Transfer Fees)

Selling your Thai property? Whether you’re cashing in on appreciation or moving on from paradise, you’ll want to understand how taxes work at the point of sale. Spoiler: Thailand doesn’t have a specific “capital gains tax,” but it does tax profits—just under different names.

Here’s what you’ll deal with as a foreign seller.

1. Transfer Fee (Again, 2%)

Just like when you bought the property, there’s a 2% transfer fee on the official appraised value. This is paid to the Land Department at the time of sale.

Most commonly, buyer and seller split it 50/50, but this can be negotiated. In some resale deals, the buyer may cover the full 2% to sweeten the offer—or the seller might absorb it to move the deal quickly. Either way, make sure it’s clear in the agreement.

2. Specific Business Tax (SBT) – 3.3% if Sold Within 5 Years

Now here’s where things get interesting. If you sell a property within 5 years of purchase, you’ll likely be subject to Specific Business Tax (SBT) at 3.3% of the appraised value or sale price (whichever is higher). This tax is designed to prevent rapid property flipping.

Exceptions? Yes. If the property has been used as your primary residence for at least 1 year, and your name is in the house registration book, you may be exempt from SBT. But this typically applies to Thai citizens—not foreign investors.

If SBT applies, stamp duty does not. These two taxes are mutually exclusive.

3. Stamp Duty (0.5% if SBT Doesn’t Apply)

If you own the property for more than 5 years, and SBT isn’t triggered, you’ll instead pay stamp duty at 0.5%. Again, it’s based on the higher of the sale price or appraised value.

Think of it this way:
Sell < 5 years = SBT (3.3%)
Sell > 5 years = Stamp Duty (0.5%)

4. Withholding Tax – Thailand’s Version of Capital Gains Tax

This is the big one. While Thailand doesn’t label it “capital gains tax,” the withholding tax acts in its place. And yes, foreigners must pay it.

Here’s how it works:

• For individual sellers, the Land Department calculates tax based on a complex formula:
  • It starts with the appraised value.
  • Then deducts a percentage based on how long you’ve owned the property (longer ownership = larger deduction).
  • Then divides the rest by the number of years held.
  • Finally, applies progressive personal income tax rates (5% to 35%).

Result? In practice, the effective tax typically ends up around 1% to 3% of the sale price for most individual sellers.

• For company sellers, the tax is simpler: a flat 1% withholding on the sale price or appraised value, whichever is higher.

This tax is withheld at the time of transfer, meaning the buyer pays it to the government on your behalf, and it’s deducted from your proceeds.

What You Actually Take Home

Between the transfer fee, SBT or stamp duty, and withholding tax, your net proceeds will be trimmed by 3% to 6% of the sale price, depending on your holding period and profit margin.

Tip for planning ahead: If you’re aiming to maximize your return, consider holding the property more than 5 years. That way, you can avoid SBT and pay only the lower stamp duty plus withholding.

Inheritance and Property Transfer upon a Foreign Owner’s Death

No one likes to think about it, but if you’re investing in property, estate planning matters—especially in a foreign country like Thailand. What happens to your condo in Phuket or your beachfront villa if you pass away? Can your heirs inherit it? Will they be taxed? Let’s break it down.

Yes, Foreigners Can Inherit Property in Thailand — But With Caveats

First, the good news: foreigners can inherit real estate in Thailand, provided the property complies with ownership laws.

• If you own a condominium, your heir (even if foreign) can inherit it—as long as foreign ownership quotas in the building haven’t been exceeded.
• But if you own land (via a Thai spouse or company), things get trickier. Foreigners cannot legally own land in Thailand, even through inheritance. In such cases, the heir may need to sell the land or transfer it within a limited time (often within one year).

This is why so many foreign investors lean toward condos—easier ownership, easier inheritance.

Inheritance Tax in Thailand: Who Pays What?

Thailand does impose an inheritance tax, but only on high-value estates. Here’s how it works:

• The tax applies only when the inherited assets exceed 100 million THB per person.
• If the heir is a direct relative (child or parent), the tax rate is 5% on the amount exceeding the 100 million THB threshold.
• For other heirs (siblings, friends, etc.), the rate jumps to 10%.

Most typical condo inheritances won’t trigger this tax. But if your portfolio includes multiple properties—or luxury assets—it’s something to plan for.

The Hidden Complexity: Legal Process & Timing

Even if inheritance tax isn’t an issue, the legal process of transferring ownership isn’t automatic.

Here’s what your heirs will need:

1. A valid Thai will (highly recommended).
2. A court order granting them the right to inherit the asset.
3. All necessary documents for ownership transfer at the Land Department.
4. Payment of applicable transfer fees and stamp duties (yes, taxes still apply).

Without a will, the court process can drag on. In some cases, the property may even face forced sale to resolve legal disputes or missed deadlines.

Proactive Estate Planning: Your Best Move

If you’re a foreign property owner in Thailand, don’t wait. Do these three things now:

1. Draft a Thai will covering your assets in Thailand.
2. Clarify ownership structures (e.g., if the property is under a company or lease).
3. Communicate with your heirs about what to expect—including tax implications.

Final Thought: Owning property in Thailand as a foreigner is absolutely possible. But protecting that investment long-term requires a plan. Without one, your dream home could become a legal and financial mess for your family.

Conclusion: Taxes Don’t Have to Be a Dealbreaker

Thailand’s real estate market is packed with opportunity—from sun-drenched condos in Phuket to long-term rental investments in Bangkok. But to succeed here, you need to do more than find the perfect property—you need to understand how taxation for foreigner real estate Thailand actually works.

The good news? Taxes in Thailand are generally straightforward and affordable—when you know what to expect. From purchase fees and rental income tax to resale costs and inheritance planning, each phase of ownership carries its own responsibilities. But none of them are dealbreakers. They’re just part of the process.

So whether you’re just getting started or already holding property, now is the time to:

• Budget for taxes during purchase
• File annual returns if you’re renting
• Plan ahead for sale or succession

And if you haven’t yet bought, remember to check our in-depth guide on how a foreigner can buy property in Thailand—because the structure of your ownership affects how you’re taxed, too.

Pro tip: Talk to a local tax advisor or lawyer if your situation involves company ownership, high-value property, or estate planning. A little advice now can save you a fortune (and a lot of stress) later.

Frequently Asked Questions (FAQs)

Ready to Invest? Explore Property for Sale in Phuket

Now that you understand how taxation for foreigners works in Thailand, it’s time to take the next step. Whether you’re looking for a holiday retreat, a rental income opportunity, or a long-term investment, Phuket offers incredible value and lifestyle.

👉 Browse our latest listings of property for sale in Phuket and make your move with confidence—backed by the right knowledge, expert guidance, and full tax transparency.