Property taxes for foreigners in Thailand consist of one-off Land Office transaction fees (Transfer Fee 2%, Withholding Tax 1%, Stamp Duty 0.5%, and Specific Business Tax 3.3% if held under 5 years) plus an annual Land and Building Tax of 0.02-0.5% on the government appraised value. Rental income is taxed under progressive PIT 5-35% or a 15% withholding for non-residents.
What Are Property Taxes in Thailand for Foreigners
Property taxes in Thailand for foreign owners fall into three distinct categories: one-time transaction taxes paid at the Land Office during transfer, an annual Land and Building Tax introduced by the Land and Building Tax Act B.E. 2562 (2019), and income taxes on any rental yield generated by the property. The system applies equally to Thai nationals and foreigners who hold a condominium under the foreign quota, with a few minor differences in how rental income is collected from non-resident landlords.
The most visible costs hit at the moment of purchase. Land Office officials calculate transfer fees, withholding tax, stamp duty and Specific Business Tax against the higher of the Treasury Department appraised value or the declared contract price. Because the appraised value is usually well below market, the contract price often becomes the basis for calculation. The exact split between buyer and seller is negotiable, but every transaction must clear these taxes before the new Chanote is issued in the buyer's name.
Ongoing taxes are far lighter. Thailand has no equivalent of UK Council Tax or US property tax bills running into thousands per year. The 2019 Land and Building Tax imposes only a small percentage on the assessed value, with a generous residential exemption. Foreign condo owners typically pay a few thousand baht per year on a mid-range Phuket unit, which is one reason the country remains attractive for long-term holders. See our how to buy property in Thailand guide for the full transaction context.
How It Works for Foreigners
At purchase, four taxes can apply to a single transaction. The Transfer Fee is 2% of the appraised or contract value (whichever is higher) and is by market convention split 50/50 between buyer and seller in Phuket new-build sales, though the contract may shift the full burden to one side. Withholding Tax is 1% of appraised value when the seller is a company; when the seller is an individual, it is calculated using progressive PIT rates on the assumed gain over the years of ownership and is paid by the seller. Stamp Duty is 0.5% of the higher of appraised or contract value, but only when Specific Business Tax does not apply, so the two are mutually exclusive. Specific Business Tax (SBT) is 3.3% (3% SBT plus 10% municipal surcharge) of the higher of appraised or contract value and is triggered when the seller has owned the property for less than 5 years. For long-term holders, stamp duty replaces SBT, which makes long-term ownership substantially cheaper to exit.
The annual Land and Building Tax introduced in 2019 charges a progressive rate based on use: residential primary homes are taxed at 0.02-0.1% on appraised value above the exemption threshold, second homes at 0.02-0.1%, commercial property at 0.3-0.7%, and unused/vacant land at 0.3-0.7% (rising every 3 years if left idle). Most foreign-owned Phuket condos fall in the 0.02-0.1% bracket. A 10 million baht appraised condo pays roughly 1,000-10,000 THB per year depending on the local municipality's effective rate.
On rental income, Thailand applies Personal Income Tax progressively from 5% (above 150,000 THB) up to 35% (above 5,000,000 THB), with a 30% standard deduction or actual expenses. Non-resident landlords (in Thailand under 180 days per year) are subject to a flat 15% withholding tax by the tenant or property manager on gross rent, which discharges Thai tax liability. VAT 7% does not apply to residential rental but does apply to short-stay hotel-style rentals.
Costs and Process
For a typical Phuket condo purchase at 10 million THB with the seller having owned the unit more than 5 years, the buyer-side budget looks like this. Transfer Fee 2% = 200,000 THB total, split 50/50 means 100,000 THB on the buyer. Stamp Duty 0.5% = 50,000 THB, customarily paid by the seller. Withholding Tax 1% = 100,000 THB, paid by the seller. SBT = zero (the 5-year rule excludes it). Buyer-side closing taxes therefore land near 100,000 THB or 1% of the price. Add 1-2% for legal due diligence, juristic person sinking fund, and bank FET handling and the all-in cost is roughly 3-4% on top of the headline price.
If the seller is selling within 5 years, SBT 3.3% replaces stamp duty and the seller-side tax burden jumps from 1.5% to 4.3%. This is why most resale contracts in Phuket schedule completion just after the 5-year mark to avoid SBT, and is a key negotiation point on flip transactions. For annual taxes, the local Tessabaan (municipal office) issues a bill in April each year payable by end of April, typically by bank transfer or in person.
Common Pitfalls
The biggest mistake foreign buyers make is assuming that the headline 2% Transfer Fee is the whole tax bill. SBT, withholding and stamp duty can collectively add 4-5% on a short-held seller's side, and the seller will try to push these onto the buyer in the contract small print. Always agree the exact tax split in writing before paying any deposit, and confirm whether the seller has owned the unit more than 5 years (which kills SBT). Ask for the original Chanote date stamp to verify ownership history.
The second common pitfall is forgetting the annual Land and Building Tax. Many absentee foreign owners ignore the April bill, accrue penalty surcharges of 10-40% plus 1% monthly interest, and only discover the debt when trying to resell. Set a calendar reminder or have your foreign quota juristic person manager handle the annual payment on your behalf.
The third pitfall is misreporting rental income. Thai Revenue Department tax audits on short-term rental income have intensified since 2023, and platforms like Airbnb now share booking data with the Thai authorities. Non-resident landlords who fail to remit the 15% withholding via their property manager risk back-tax assessments plus 100% penalty. Always run rental income through a registered Thai property manager who handles withholding and issues you an annual tax certificate.
FAQ
How much tax does a foreigner pay when buying a condo in Thailand?
Total transaction taxes are typically 2-6% of the price, depending on the seller's ownership duration. The buyer's share is usually 1-2%, the seller's share 1-4%. Transfer Fee 2% is split 50/50 by Phuket market convention, with withholding, stamp duty or SBT borne by the seller.
What is the annual property tax in Thailand?
The annual Land and Building Tax ranges from 0.02% to 0.7% of the government appraised value, depending on use. Residential primary homes pay 0.02-0.1%, second homes the same, commercial 0.3-0.7%, vacant land 0.3-0.7% rising every 3 years. A 10M THB condo typically pays 1,000-10,000 THB per year.
Is rental income from a Thai condo taxed for foreigners?
Yes. Resident foreigners (180+ days per year) declare rental income under progressive PIT 5-35% with a 30% standard deduction. Non-resident landlords are subject to a flat 15% withholding tax on gross rent, collected by the tenant or property manager and remitted to the Thai Revenue Department, discharging their full liability.
Does VAT apply to property sales in Thailand?
No. VAT 7% does not apply to residential property sales or long-term residential rentals. VAT does apply to short-stay accommodation classed as hotel services and to commercial property sold by a registered company. Most foreign condo transactions and standard long-stay rentals are outside the VAT net.
What is Specific Business Tax in Thailand?
Specific Business Tax (SBT) is 3.3% of the higher of appraised or contract value, charged when the seller has owned the property less than 5 years. It replaces the 0.5% stamp duty in those cases. Holding a unit at least 5 years before resale saves the seller 2.8 percentage points on the exit tax.
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By Anna Baranova, Director, InDreams Phuket | Last updated: May 24, 2026
