Own a House in Thailand...Surprise!

[Undaunted]

Some time ago I read a post on the Thai Visa forum about a real estate tax the government will impose however, at the time I thought nothing of it. I was having lunch today with a friend who owns 2 houses in Pattaya upon checking the mail in one house he had a bill from the government for a bit over 200,000 baht in retroactive real estate tax. A few questions arise, will this also be applicable to condominiums and for those purchasing a property is it encumbered with previously unpaid tax?

[Gaybutton]

Seems to me you're going to need a Thai attorney to get reliable answers to those questions. I certainly would not rely on guesses people might post on message boards.

[richsilver]

A reliable answer from a Thai attorney? Ha, ha, ha, ha, ha,ha, etc.

[Gaybutton]

A reliable answer from a Thai attorney?

Better than answers posted on a message board. I've used Thai attorneys before and was quite pleased with the results.

[mahjongguy]

There are some reports about this in the ThaiVisa property forum. I gather the tax only applies to commercial property, and farang quite often purchase houses via a Thai company. This is usually not the case with condos.

That said, if it matters, ask an attorney.

[Undaunted]

There are some reports about this in the ThaiVisa property forum. I gather the tax only applies to commercial property, and farang quite often purchase houses via a Thai company. This is usually not the case with condos.

That said, if it matters, ask an attorney.

Yes, the friend I mentioned established a company for the purpose of acquiring the houses, as I understand this is the only way for a foreigner to own a house. Every year he does an accounting however, this is the first time he is required to pay this particular real estate tax and do so retroactively.

[Jun]

There is an article on property taxes in the Business section of the Bangkok Post.

It's not the best example of clear reporting, with a table of tax rates by value, then in the body of the article, it seems to say that the first 50 million baht of private property is exempt. I would expect to see that point reported in the table.

Also there are reports of developers discounting unsold property to avoid paying the tax.

[Dodger]

New property tax legislation was entered into law earlier this year (B.E. 2562) which replaces the current House and Land Tax Act. This new Act (law) is not available in English yet, although numerous summaries have been published in English by foreign law firms.

If you're not rich - don't worry about it.

These new tax laws, which go into effect Jan 1, 2020, address all property types, i.e., commercial, residential, and land and buildings used for agriculture purposes.

These new laws are not a factor if the value of your residential property (house or condo) is less than 50 million baht and it is in your name (foreign deed) for 2020 & 2021 under an exemption. If the property (house or condo) was purchase in a "Company Name" taxes may be levied, as well as retroactive taxes being charged, as experienced by Undaunted's friend. As an example: The maximum amount that a condo valued at less than 10 million baht could be taxed after this period of exemption is 0.02% as long as it is in your name (foreign deed).

I asked Jai to read the Thai version of the new Act B.E. 2562 which provides a lot more information than the English summaries which are widely available. According to what he read, the first property that a person owns, which is valued at less than 50 million baht, is exempt from taxes, although, any additional properties may be subject to taxes. The actual tax amounts for these additional properties are determined by the local jurisdiction, although cannot exceed the maximum tax amounts as show in the link below.

https://www.bdo.co.th/en-gb/insights/ta ... n-Thailand

Everything I wrote above is fact - everything below is just opinion:

It appears, the way the new Act is written, that higher taxes will be charged to those owning properties in "Company Names". There are no clear maximum tax limits for such properties, and the determination of the tax amount is left up to the local jurisdiction. I don't need to tell you what that's about.

I've always felt that owning a property (condo or house) in a "company name" in Thailand had risk attached to it, and that one day the powers-to-be would be looking for a way to cash in on this legal loophole. The Thais, unless they own multiple properties, would not be effected by this, but the foreigners, who have been buying these lower priced properties in company names for decades, could end up feeling the sting.

Undaunted: The reason your friend was hit with a retroactive tax bill is because he owns more than one property, the properties are in "company' names", he may, or may not be, earning rental income, and the previous House & Land Act (law) required taxes to be paid under these circumstances, but no one was collecting them. This is the same exact scenario as the TM30 fiasco. The law required these forms to be completed by hotels, but the law wasn't being enforced - so nobody was responding.

[Gaybutton]

Sounds like the wicked old Thai tax collector was looking for a way, and finally found a way, to "get you."

[2lz2p]

Some time ago I read a post on the Thai Visa forum about a real estate tax the government will impose

Which government?

The articles mentioned regarding changes in the Thai Act re real estate taxes, as I recall, are to go into effect - not already established. Further, when they do apply, there is a relatively high threshold on the value of property that will be subject to the tax.

That said, and I cannot be sure, but I seem to recall seeing articles/messages that relate to taxes imposed by the City of Pattaya that has been in effect for some time. Thus my question as to which government as the retroactive real estate tax may be one imposed by the City rather than the by the country of Thailand.