Many foreigners do not realize this 'rental' tax exists in Thailand.
When they lease a condo or land and house they often read over the clause in the contract that mentions the taxes, or it is suggested that this is an unimportant standard clause and no one pays tax in Thailand (not true). It is under the housing and land tax act the owner's responsibility to pay this tax before the end of February each year but it is almost always passed on to the lessee in the lease agreement. It is strongly recommended to read through the lease agreement and terms before you sign it and take in account this extra yearly use tax you must pay.
You always will find something in the contract like 'the lessee agrees to pay to the lessor any and all taxes, if any, beginning with taking possession of the condo unit and during the lease term hereof which may be levied against the unit.....'.
When you sign for it you must pay house and land tax as part of the terms of the lease or rent.
company and housing and land tax
Also foreigners owning a property (land and house or condo) on a company name must pay this 'rental tax' even when they do not pay rent to the company. Note that you do not get an invoice from the local government for it, and you may get away with not paying it (because the local authorities do not have the manpower to actually go around an check all properties), but a few things in life are quite sure and that is death and taxes!
We recently had a client owning a property in a company but when selling he got taxed and fined for not paying land and housing tax for the period he owned the land and house in his company! This means there are other signals that triggers the local authorities to come after you, like selling your company owned home.
Answered 10 years ago
There are currently no general property taxes in Thailand, but there are plans (read: 'new amended property tax law') to introduce a property tax based on the use of the property with 3 maximum rates: (1) up to 0,5 % of the appraised value of the land and building if the property put to commercial use (in general meaning not owner occupied), (2) up to 0,1 % of the appraised value if the property is used for residential purposes by the owner (who has his name in the housebook), and (3) up to 0.05% of the appraised value if the land is used for agricultural purposes.
The appraised government property value is used for tax purposes and set by the treasury and land department every 4 years
Currently there is a very low local land maintenance tax, with as tax object land. This is a neglectable amount and depending on location, size and use of the land this could be a few baht up to a maximum of a few hundred baht per year.
housing and land tax
If you own land and house but you do not use it (say it is your second home), or when you rent it out to tenants, or put it otherwise to commercial use or storage (in general the property is not owner occupied) then the owner must pay land and housing tax at a fixed rate of 12,5% over the received rent or assessed rental value, whichever in higher.
The assessed rental value could for example be applied when the rent is below the market value, or in case a foreigner owns land and house through a Thai limited company but lives in the house without paying rent to the company. This is under housing and land tax act not considered as 'owner occupied' and the company must pay land and house tax to the local municipality (or.bor.tor) over the assessed rental value before the end of February each year. Is does not make any difference whether or not you have a rental contract or pay rent to your company.
The assessed rental value is based on the appraised value of the property and a rental calculation method.