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The Land and Building Tax in Thailand

Panoramic skyline of Bangkok showing residential and commercial properties subject to the Land and Building Tax Thailand.

The Evolution and Legal Framework of Land and Building Tax in Thailand 

The Land and Building Tax Act B.E. 2562 (2019) introduced the Land and Building Tax in Thailand and fundamentally transformed property taxation in Thailand, replacing outdated House and Land Tax Act B.E. 2475 and Local Development Tax Act B.E. 2508. This legislative overhaul aimed to streamline assessment, strengthen collection, and equalize the tax burden. The new system took effect January 1, 2020, synchronizing property levies with current real estate practices while cultivating economic and urban growth.

Under the Act, individuals and legal entities retaining ownership, possession, or use of land, buildings, or condominiums as of each January 1 must pay the Land and Building Tax in Thailand to local authorities. Payment is due in April annually. The assessed value basis, set by the Land Code registration fee department, considers official land, building, or unit prices. Actual rates, within fixed maximums and transitional allowances, depend on royal decrees while exemptions are outlined.

Thailand’s property tax system was historically fragmented and inefficient, with local authorities facing difficulties in enforcing taxation uniformly. The introduction of the Land and Building Tax in Thailand enhances transparency and accountability in administration, solidifying the government’s development commitments.

This article examines the legal provisions, tax rates, exemptions, compliance obligations, and penalties under the Land and Building Tax Act to provide an in-depth understanding of this critical aspect of property ownership in Thailand. 

Table of Contents

Scope and Applicability of the Land and Building Tax in Thailand 

Who is liable to pay land and Building Tax in Thailand 

The Land and Building Tax in Thailand applies to all landowners, building owners, and condominium owners, including individuals and corporations with possession rights. Foreigners owning structures or condominium units under Thai legislation are also subject to this duty. Additionally, entities with leasehold rights exceeding 30 years may be viewed as property holders for tax purposes.

Types of Taxable Properties 

The Land and Building tax in Thailand is applied to properties based on their usage. Agricultural land, like rice farming fields, crop fields, plantations, livestock operations, and aquatic animal farming, is subject to a reduced duty rate. Residential properties, whether single homes or condominiums, fall under a different tax category. Land and structures used for commercial and industrial purposes are also taxable, with higher rates imposed. Furthermore, land left vacant or unused is progressively taxed to discourage speculation and ensure effective land utilization.

Land and Building Tax rates and Calculation 

How is the taxable worth decided? 

The tax is calculated on the total value of the land or building, as determined by the government. As stated in Article 35, this assessment relies on official land appraisal references established under the Land Code. The reference value stems from the official land appraisal used for registration fees under the Land Code. If a specific plot does not have a pre-evaluated value, particular rules must be adhered to determine its taxable worth. Tax rates for the Land and Building tax in Thailand vary depending on the type of property usage

The rates for Agricultural Land

 Agricultural land is taxed at progressive rates based on its value: 

  • Between THB 1 million and THB 75 million: 0.01%.
  • Between THB 76 million and THB 100 million: 0.03%.
  • Between THB 101 million and THB 500 million: 0.05%.
  • Between THB 501 million and THB 1 billion: 0.07%.
  • More than THB 1 billion: 0.10%.

Tax rates for Residential Properties 

For residential properties owned by individuals whose names are listed in the household registration documents, the tax rates are:

  • Between THB 1 million and THB 25 million: 0.03%.
  • Between THB 26 million and THB 50 million: 0.05%.
  • More than THB 50 million: 0.10%.

Land and Building tax rates for building owned by individuals

For buildings owned by individuals for residential use whose names are listed on the household registration documents, the tax rates are:

  • Between THB 1 million and THB 40 million: 0.02%.
  • Between THB 41 million and THB 65 million: 0.03%.
  • Between THB 66 million and THB 90 million: 0.05%.
  • More than THB 90 million: 0.10%.

Tax rates for other residential properties 

For other residential properties, the Land and Building Tax rates are:

  • Between THB 1 million and THB 50 million: 0.02%.
  • Between THB 51 million and THB 75 million: 0.03%.
  • Between THB 76 million and THB 100 million: 0.05%.
  • More than THB 100 million: 0.10%.

Tax rates for land and buildings used for purposed other than agricultural and residential use 

For land or buildings used for purposes other than agricultural and residential use, the Land and Building tax rates are:

  • Between THB 1 million and THB 50 million: 0.30%.
  • Between THB 51 million and THB 200 million: 0.40%.
  • Between THB 201 million and THB 1 billion: 0.50%.
  • Between THB 1,001 million and THB 5 billion: 0.60%.
  • More than THB 5 billion: 0.70%.

Tax rates for vacant or unused land 

For vacant or unused land, the tax rates are:

  • Between THB 1 million and THB 50 million: 0.30%.
  • Between THB 51 million and THB 200 million: 0.40%.
  • Between THB 201 million and THB 1 billion: 0.50%.
  • Between THB 1,001 million and THB 5 billion: 0.60%.
  • More than THB 5 billion: 0.70%.

Maximum threshold for Land and building Tax in Thailand 

By law, maximum tax rates have been established and are adjustable through royal decree. According to Article 37 of the Act, 

  • Agricultural land: is  capped at 0.15%,
  • Residences: is capped 0.30%
  • Commercial or industrial property: is capped at 1.2%.
  • Unoccupied land: is capped at 1.2% and increases every three years up to a ceiling of 3%.

Land and Building Tax payment and Compliance 

When the Land and Building tax in Thailand is due 

According to the Article 44 of the Act, owners receive tax assessments in February for the following obligations. The deadline for Payment of the Land and Building Tax in Thailand falls on April 30 each year. Payments can be made via bank transfer, local government offices, or online platforms. In certain cases, partial installment payments may be permitted under specific conditions. The law further specifies important aspects: 

  • Article 44s list the pertinent details of the owned property such as identification information, assessed worth, and amount owed.
  • Article 45 gives the capacity to Authorities to request supplementary documentation to verify assessments as needed.
  • Article 53 provides that the administration can also correct erroneous assessment within three years of the original notification.
  • According to Article 73 and 82, Taxpayers maintain the right to both challenge and appeal contested valuations.

Where can the Land and Building Tax be paid? 

Tax payments can be made at various designated government offices, including:

  • The Municipality Office for land or buildings situated in municipal areas.
  • The Tambon Administrative Organisation for properties located within the jurisdiction of a Tambon.
  • The Khet Office for properties within the Bangkok Metropolitan Administrative area.
  • Pattaya City Hall for properties located in Pattaya.
  • Any other local government office specified by law as the designated tax collection authority for properties in specific locations.

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Land and Building Tax in Thailand Exemptions and Reductions 

Exemptions for certain Properties 

Section 8 of the Land and Buildings Tax Act specifies that some properties are not subject to taxes. Land and structures owned by the national government and utilized solely for official purposes and not for private financial gain are tax-exempt. Similarly, properties serving as offices of international organizations such as the United Nations, or those granted exemption under a treaty, benefit from tax immunity.

Diplomatic missions of foreign nations, guided by the core concept of reciprocity, also qualify for exemptions. Furthermore, the Thai Red Cross along with religious sites such as temples, shrines, and residences for monks and clergy are excluded provided they are not exploited commercially.

Cemeteries and crematoriums run without intention of profit are omitted from taxation. Foundations and charities can take advantage of exemptions so long as their activities adhere to their nonprofit designations. Partially publicly useful privately held properties may receive partial Land and Building Tax exemptions depending on the scale of their public utilization.

Common spaces within condominium complexes are tax-exempt under condominium legislation while land for public services governed by development laws and industrial estate authorities also fall outside the scope of taxation.

Exemptions Based on Property Usage and Value 

Certain exemptions for the Land and Building Tax in Thailand also apply depending on how property is used and its value. Land or buildings employed for agricultural purposes are excused from taxation if their complete taxable worth does not exceed THB 50 million. Likewise, properties used for living arrangements are excused if the owner’s name is noted in the household registration certificate as of January 1 of the tax year and the taxable worth does not exceed THB 50 million. If the owner solely possesses the building without owning the land, and uses it for living arrangements while being enrolled on the household registration certificate as of January 1, the exemption applies if the taxable worth does not exceed THB 10 million.

Penalties for Late Land and Building Tax Payment 

Taxpayers who fail to pay the land and building tax in Thailand on time are subject to consequences and penalties described in Article 68 of the Land and Building Tax Act. If the tax remains unpaid, local government authorities will issue a written warning in May, compelling instant payment of the overdue tax along with consequences:

  • If the taxpayer pays the tax before receiving a written warning, a 10% consequence applies.
  • If the taxpayer settles the tax after the written warning but within the deadline specified, a 20% consequence is imposed.
  • If the tax is not paid within the specified period, a 40% consequence applies.
  • An additional 1% monthly surcharge is levied on overdue tax amounts, with any fraction of a month counted as a full month. 

Strict enforcement steps can be taken against delinquent taxpayers, including property seizure and legal action for non-payment.

Conclusion 

The Land and Building Tax in Thailand represents a significant reform in property taxation landscape. By updating outdated models that had long been in place, the new law fosters fiscal accountability, economic vitality, and a fairer distribution of the tax burden. Those who own land or structures in Thailand must now achieve nuanced understanding of this reformed regime’s intricate details to fully adhere to regulations.

Failure to follow property tax statutes can result in severe financial and legal consequences. As Thai authorities refine aspects of the system moving forward, landowners must stay abreast of evolving rules and adjust accordingly. Consulting expert guidance from real estate attorneys or tax professionals is strongly advised for those seeking clarity on their updated obligations. The complexities of full compliance underscore why guidance from such specialists is so recommended.