Finding your dream villa in Chiang Mai: Understanding taxes made simple
As Chiang Mai’s charm continues to captivate families from all walks of life, both Thai nationals and expatriates are discovering the joy of making this city their home.
If you’re among those considering a villa in this serene paradise, you might be wondering about the financial aspects—especially when it comes to taxes.
We’ve gathered some insights to help you navigate the villa buying process with ease. While taxes might not be the most exciting topic, they’re an important part of the journey to owning your dream home. Alongside taxes, it’s also good to be aware of land and property titles, ensuring your new villa is yours in every sense. For a deeper dive into this, check out our other article, "Finding your dream villa in Chiang Mai: Understanding ownership titles."
Some families choose to buy land to build their villa, while most people, for safety and simplicity, opt to purchase an existing villa. Below, we provide an overview of both types of transactions—buying land and purchasing a villa—including details on the associated taxes whether you’re buying or selling through a company or as an individual.
Here are the tax costs involved in selling and buying land in Thailand.
Transfer fee | Stamp Duty | Business Tax | Personal Income Tax | |
Seller (Individual) | 2% of the registered value. | 3.3% of the assessed value or sale price, whichever is higher. For land held for more than 5 years, no business tax is required. | Maximum 2.5% of the assessed value. | |
Seller (Company) | 2% of the registered value. | 3.3% of the assessed value or sale price, whichever is higher. | Maximum 1% of the assessed value or sale price, whichever is higher. | |
Buyer (Individual) | 0% if seller pays 2% of the registered value. | 0.5% (If there is a business, it will not have a 0.5% stamp duty.) | ||
Buyer (Company) | 0% if seller pays 2% of the registered value. | 0.5% (if there is business will not have stamp duty 0.5%） |
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The benefit of using a company to buy and hold land is that the future buyer only needs to change the shareholder's name, which can save on taxes.
Foreigners cannot own and hold land in Thailand; the land must be purchased in the name of a Thai citizen.
Below are the tax costs for selling and buying property in Thailand.
Transfer fee | Stamp Duty | Business Tax | WHT/Profit Tax | |
Seller (Individual) | 2% of the appraised price that the land office.* | 0.5% - This is only due if the owner has had the property for more than 5 years and is not required if ownership was for 5 years or less. | 3.3% (SBT) of the assessed value or sale price, whichever is higher. For property held for more than 5 years, no business tax is required. | A maximum of 2.5% of the assessed value is payable in the tax year, but this amount will be deducted from the personal income tax paid at the land office. |
Seller (Company) | 2% | 0% | 3.3% | Pay 1% at the land office and 20% of the profit in the tax year, but this amount will be deducted from the income tax paid at the land office. |
Buyer (Individual) | 0 | 0 | 0 | 0 |
Buyer (Company) | 0 | 0 | 0 | 0 |
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The tax rate for buyers, whether a company or an individual, remains the same. The difference lies in the seller’s obligations. For instance, if a company is selling the property, the withholding income tax (WHT) will be 1% of the higher price. Additionally, there will be a 3.3% business tax, regardless of whether the land has been held for more than five years. (Note: If business tax is applied, the 0.5% stamp duty will not be charged.)
Using a company to buy and hold property is commonly seen as beneficial. This is because the future buyer only needs to change the shareholder’s name, which can result in significant tax savings for the seller. Additionally, it allows for the deduction of construction costs and simplifies ownership changes.
Due to Chiang Mai being a hot spot for international tourists, the rental market is strong, and some people choose to buy villas to rent out. If this is your buying objective, the tax on rental income will be subject to withholding tax: 5% for individual landlords and 1% for corporate landlords.
This article provides an overview of tax considerations for families thinking about buying a villa in Chiang Mai. However, please keep in mind that tax laws and policies can change over time, and the specifics can vary depending on individual circumstances. We strongly recommend consulting with legal and tax professionals for detailed advice tailored to your situation, ensuring you make well-informed decisions. This article should not be considered a definitive guide.