Do I need to pay tax on my property rental income?
Updated: Jun 16, 2020
This is a very common question often asked by investors and the answer is "yes", the following is how much tax do I need to pay?
The tax calculation could be quite complicated but we will try our very best to explain it as simple as we can.
Basically there are 2 types of tax assessments upon the incomes of renting.
Land and Building Tax; is an annual payment to be paid to district department
Income Tax; is required payments twice a year (mid year and end of the year) to be added into your annual income
Now let’s see in detailed descriptions and examples below;
1. Land and Building Tax: It is a progressive rate depending on the value of your property
assessed value < 50 million baht*0.3%
assessed value between 50-200 million baht*0.4%
assessed value 200-1,000 million baht*0.5%
assessed value 1,000-5,000 million baht*0.6%, and
assessed value > 5,000 million baht*0.7%
A) if assessed value of your property is 15,000,000 baht
15,000,000*0.3% = 45,000
Your land and building tax is 45,000 Baht
B) if assessed value of your property is 85,000,000 baht
[50,000,000*0.3% = 150,000] + [35,000,000*0.4% = 140,000] = 290,000
Your land and building tax is 290,000 Baht
This amount has to be paid at the district office.
2. Income Tax: There are 2 different calculations i) Net Income and (ii) Assessable Income.
Here is how to find Net Income and Assessable Income;
(i) Net Income is calculated by Rental Income - Expenses (approximately 30% of the rental income or actual expenses with official receipts)
(ii) Assessable Income is 0.5% of your rental income, however this calculation can only be used in the case that your rental income is more than 1 million baht per year.
Once you have the amount of (i) and (ii), use the higher amount to pay your Half Year Personal Income Tax and Year-End Personal Income Tax
Note: Land and Building Tax is 90% reduced in 2020 due to Covid-19