Thailand real estate: is there a wealth tax?

Thailand has no property tax system and for the moment, two local taxes apply people own real estate.

The first tax is the local development tax imposed in people who either have or own land. This tax rate varies depending on the estimated land value as estimated by the local authorities. Certificates may be granted if the owner uses the country for personal homes, livestock and/or crops growing. The amount of such aid depends on the situation in the country. It is said that the prices are so low, that officials generally don't bother on an annual basis to collect. These houses, buildings or any other improvements that country tax built.

It is the House and land tax, which the owner of a House, the building, structure or the country which is either rented or commercial use. Taxable property under the House and property tax includes houses occupied by the owner, industrial and commercial buildings and land use in combination thus. The tax rate is 12.5% of the estimated annual rental value of the property or the actual rental value, depending on, what is the highest. Owner occupied residences are exempt from this tax. However, that this exemption applies only to individuals, not for legal entities, because entities are kept for commercial exploitation of your property. In other words, is a company that acquires an Office to pay the tax even if the company premises, uses an own offices serve. It is a project, the House and property tax period of 2 years, a real property tax replace what would the rate of 0.01% to 1% of the estimated value of the property, depending on the type of the property. The rate would be 0.01% on agricultural land, 0.1% to personal residences; 0.5% to commercial buildings and 1% on undeveloped land.

Note that it is possible to mitigate the cost of the House and property tax. If you rent furnished such as condominium in Pattaya, you can run two agreements with your tenants. The first agreement for the condo rental unit and the second agreement is for the rental of furniture and/or additional services (if available). This reduces the cost of the House and land control because tax only on annual rent is from rental property, but not on rental income, received from the rental of furniture, etc.

If the rental agreements between two people, there is no VAT applicable on the furniture or service agreements. If you however, the owner of the condominium is a company, and if it is registered for VAT purposes, VAT at 7% on the furniture or service agreements which run between the lessor and the lessee will be.

For example, if out condo in Pattaya you furnished for a rent of THE 60,000 per month and only make rent an agreement with your tenant, then you must pay one annual home and property tax as follows: 60,000 x 12 x 12.5% THE = 90,000. You can control to legally by the rent in two agreements simply save removal. For example you may rent the fees THE 35,000 per month for renting the condo and 25,000 for the rental of furniture. If you break the rent in this way the country and House taxes are only the 35,000 x 12 x 12,5% = the 52,500. If but the owner the condominium is a society for VAT registered, then have it, apply VAT to the furniture lease agreement. Even so, save the company on the estate tax, money because the lessee supports the cost of VAT.

The issue of withholding tax also applies to the rental. If an individual rents a property to another individual in Thailand, paying the rent is not subject to withholding taxes. However, if a company is a property rental, then the company must a withholding tax from the amount of the rent paid owner (whether an individual or a company) deduct. The withheld amount must use as a tax credit against the annual income tax for the tax administration on behalf of the owner of the withholding tax, will be provided. The rate of withholding tax is 5% in Thailand. Note that if a rental outside Thailand is paid, the amount of tax from the payment may be refused 15%. Additionally, if you are a non-resident offered a rental guarantee from a developer, you never forget, to reflect the withholding tax when calculating your potential income.