Buildings and properties in Thailand, in general, are not subject to paying capital taxes. However, properties put to commercial use, for example, residential houses not occupied by the owners and commercial buildings, are subject to 12.5% of higher of annual rental value or the annual assessed rental value. Such type of buildings is under the Building and Land Tax Act. Rental tax on leased properties is due by the end of February each year.
Taxpayers of the building and land tax are all owners of qualifying properties. This scenario also applies if the ownership of the building is separate from land. Exceptions to this rule are owner-occupied properties, which are exempt from building and land tax. In the case of an owner owning more than one residential properties, the first one can be exempt from paying such tax.
A completely otherwise scenario is foreign owned properties purchased through a Thai limited company. Such building is subject to building and land tax in Thailand even if the foreign owner resides in such property. It is not considered as owner-occupied property regardless of whether the company makes any money out of it or not. Foreign owners are mostly unaware of this tax liability and if caught at the occasional checks done by the tax authorities, they run the risk of heavy fines and higher tax assessments.
Unlike the above exception of owner-occupied properties is a small tax imposed on undeveloped land. It is a local land tax and only concerns owners who are in possession of the land without any building on it. The rate of tax depends on a number of variables. However, this amount is very small as compared to building and land tax.
If you are looking to purchase a property in Thailand and want to seek professional assistance with building and land tax, contact Sunbelt Asia Legal Advisors. We are a law firm in Thailand. Our professional solicitors are experts in dealing with the taxes and the rates applicable. We can help you in all the tax matters and if you are fined for incompliance with the taxes, we can fight the case on your behalf. Having a vast experience in our arsenal, our team of legal and accounting experts can be your best partners in dealing with building and land tax. If you have any questions or queries or want to book a free consultation with us, contact us now at +66 (0)2642-0214.
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