Is Thailand Tax-Efficient for Foreign Property Buyers?
2026 Guide to Property Taxes, Rental Income & Ongoing Costs
Thailand continues to attract international property buyers for structural reasons: pricing that remains accessible relative to many global gateway cities, resilient professional rental demand in central Bangkok, and tourism-supported rental markets in selected parts of Phuket. For serious investors, however, the question is not whether a property can rent. It is whether, after tax and operating costs, the investment remains compelling.
Thailand’s property tax framework is characterised by low annual holding charges, rental income taxation after structured deductions, and exit taxes that are materially influenced by holding period. It is not a zero-tax jurisdiction, and it does not favour short-term speculation. But for medium- to long-term investors modelling cashflow realistically, taxation is rarely the variable that undermines the investment case.
If you are still evaluating location fundamentals before modelling returns, our analysis of where to buy property in Bangkok and where to buy property in Phuket may provide useful context. Tax efficiency only becomes relevant once the underlying asset makes sense.
Thailand Property Tax: Key Takeaways for Foreign Buyers (2026)
- Annual property tax is low: Typically 0.02%–0.10% of government appraised value.
- Rental income is taxable: Tax is calculated after a 30% statutory expense deduction or actual documented costs.
- Effective rental tax is often moderate: Commonly under 10–15% of gross rental income for individual investors.
- Exit tax depends on holding period: 3.3% Specific Business Tax if sold within 5 years; 0.5% stamp duty thereafter.
Annual Property Tax in Thailand
Thailand’s Land and Building Tax is calculated on the government’s appraised value rather than the transaction price. For most foreign-owned condominiums held as investment property, the applicable rate begins at 0.02% for non-owner-occupied residential use, rising gradually in higher valuation bands.
In practical terms, the numbers are modest. A condominium with an appraised value of THB 12,000,000 would incur approximately THB 2,400 per year at the 0.02% rate.
This is rarely a yield-altering cost. In most well-managed buildings, recurring maintenance fees exceed annual property tax several times over. The significance of Thailand’s annual property tax is therefore not its burden, but its relative lightness.
Ongoing Ownership Costs
Tax efficiency cannot be assessed in isolation from operating structure. Condominium ownership typically involves common area maintenance (CAM) or juristic fees charged per square metre per month, an initial sinking fund contribution at purchase, and depending on rental model property management, insurance, and vacancy-related utility costs.
In central Bangkok, common area fees often range between THB 40 and THB 90 per square metre per month depending on specification and facilities. In higher-amenity resort developments in Phuket, fees may sit above this range.
For a 60 square metre unit with a THB 70 per square metre monthly maintenance fee, the annual cost is: 60 × 70 × 12 = THB 50,400
That recurring operating cost materially outweighs annual property tax. When modelling net yield, operating structure typically matters more than annual taxation.
How Rental Income Is Taxed in Thailand
Rental income derived from Thai property is taxable in Thailand. The determining factor is not residency, but the fact that the income arises from a Thai asset.
Individual property owners are permitted to deduct expenses before income tax is calculated. Thailand allows either a statutory 30% deduction from gross rental income or deduction of actual documented expenses if higher.
To illustrate the practical impact, consider a condominium generating THB 1,200,000 per year in rent.
Using the statutory deduction:
Gross rental income: THB 1,200,000
30% statutory deduction: THB 360,000
Taxable income: THB 840,000
Applying Thailand’s progressive personal income tax bands to THB 840,000 results in total tax of approximately THB 83,000. That equates to roughly 6.9% of gross rental income and just under 10% of taxable income.
For many individual investors earning between THB 1–2 million annually from a single property, effective rental taxation frequently falls within the single-digit to low-teen percentage range of gross rent once deductions are applied.
Where actual operating costs exceed 30%, for example in certain managed rental pool structures, deducting documented expenses may reduce taxable income further. When modelling yield in markets such as those examined in our Bangkok rental yield analysis or Phuket rental yield breakdown, it is critical to model rental income after expense deductions rather than at headline marginal tax rates.
Personal vs Corporate Ownership
Corporate ownership in Thailand is subject to a standard 20% corporate income tax on net profit. For larger portfolios or active rental operations, a company structure may offer planning flexibility or profit retention advantages.
However, for many individual investors holding a single property, personal ownership frequently results in a lower effective tax rate than 20% once progressive income bands and deductions are applied. Corporate ownership is therefore not inherently more tax-efficient; suitability depends on scale, reinvestment strategy and administrative preference rather than headline rate alone.
Sale and Exit Taxes
At transfer, a 2% transfer fee applies to the government appraised value. The principal variable affecting exit cost is the five-year holding threshold.
If a property is sold within five years of acquisition, Specific Business Tax (SBT) at 3.3% applies to the higher of the sale price or appraised value. If held longer than five years, this is generally replaced by 0.5% stamp duty.
The financial impact scales with property value:
| Sale Price (THB) | Sold < 5 Years (3.3% SBT) | Sold > 5 Years (0.5% Stamp Duty) |
|---|---|---|
| 10,000,000 | 330,000 | 50,000 |
| 15,000,000 | 495,000 | 75,000 |
| 25,000,000 | 825,000 | 125,000 |
Thailand does not impose a separate standalone capital gains tax layer on individuals. Gains are effectively captured within the transfer and withholding system at the point of sale. For investors holding beyond five years, exit friction reduces materially.
Overall Tax Profile at a Glance
| Tax Category | Typical Level | Practical Effect |
|---|---|---|
| Annual Property Tax | 0.02%–0.10% of appraised value | Minimal recurring impact |
| Rental Income Tax | After 30% deduction or actual expenses | Often under 10–15% of gross rent |
| Exit < 5 Years | 3.3% Specific Business Tax | Higher transaction friction |
| Exit > 5 Years | 0.5% Stamp Duty | Reduced exit cost |
So is Thailand tax-efficient?
Annual property tax is low, rental income is taxed after real expense deductions, and exit costs fall sharply once the five-year threshold is passed. For investors taking a medium- to long-term view, tax rarely undermines the economics of the deal.
Thailand’s framework does not reward rapid resale strategies. It does, however, provide predictability for investors adopting a medium- to long-term horizon. For buyers modelling realistic operating costs alongside taxation, the dominant variables remain asset quality, entry discipline and liquidity at exit.
On that basis, Thailand can reasonably be regarded as tax-efficient for disciplined foreign property buyers in 2026.
Frequently Asked Questions: Thailand Property Tax
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Yes. Foreigners who own condominium units in Thailand are subject to the same Land and Building Tax regime as Thai owners. For non-owner-occupied residential property, the annual rate typically begins at 0.02% of the government appraised value, rising in higher value bands.
There is no separate “foreigner surcharge” on annual property tax.
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Yes. Rental income derived from property located in Thailand is taxable in Thailand, regardless of the owner’s nationality.
Individual owners may deduct either:
A statutory 30% expense allowance, or
Actual documented expenses, if higher.
Tax is then calculated on the remaining taxable income using Thailand’s progressive personal income tax rates.
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It depends on rental level and deductions, but for many individual investors earning between THB 1–2 million annually from a single property, effective tax often falls within the single-digit to low-teen percentage range of gross rental income once the 30% deduction is applied.
For example, a property generating THB 1,200,000 per year may incur approximately THB 80,000–90,000 in income tax after deductions, assuming no other Thai income.
Actual liability depends on total income and structure.
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Thailand does not impose a separate standalone capital gains tax on individuals in the way some jurisdictions do.
Instead, gains are captured within the transfer and withholding system at the point of sale. The key variable affecting exit cost is the holding period.
If sold within five years, Specific Business Tax (3.3%) generally applies.
If held longer than five years, this is typically replaced by 0.5% stamp duty.
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When selling, the following may apply:
2% transfer fee (based on government appraised value)
3.3% Specific Business Tax if sold within five years
Or 0.5% stamp duty if held more than five years
Withholding tax also applies and is calculated differently for individuals and companies, but it is not an additional “capital gains tax” layer — it forms part of the transfer taxation process.
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Not necessarily.
Corporate ownership is subject to 20% corporate income tax on net profit. For investors holding one residential unit, personal ownership often results in a lower effective rate once progressive income bands and deductions are applied.
Corporate structures may be appropriate for larger portfolios or reinvestment strategies, but they are not automatically more tax-efficient.
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In comparative terms, annual property taxes are relatively low. Rates for investment residential property typically begin at 0.02% of appraised value, meaning annual liability is often modest relative to rental income and maintenance costs.
For most investors, annual property tax is not a major determinant of yield.
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No. Property ownership does not automatically grant visa status or tax residency.
Thai tax residency is generally determined by physical presence in Thailand for 180 days or more in a calendar year. Property ownership alone does not change tax residency status.
