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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.

  1. Land and Building Tax; is an annual payment to be paid to district department

  2. 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%

For example:

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

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