Who is liable for annual property tax in a business rental situation?

[ghworker2010]

Last year we signed a 10 yr lease to rent a building and registered it at the land office. We paid the tax associated with that. 

 

We are overseas at the moment and thus I can't read our contract. Right before leaving we paid the sign tax. The following week the district office called our employee asking about the property tax.... She must have called our landlord who subsequently paid it. He sent evidence to my wife on line and gave his bank account. 

 

Is this something that we as a tenant has to pay or does the landlord traditionally pay this? If its not in our contract then should we be asking him to pay half. The landlord kind of let our attorney draft the contract and I can't remember anything about this tax. 

 

thanks

[davidst01]

I found this link but its old:

 

 

Anyone have any recent info on this subject?

[ghworker2010]

Found this old thread but the answer is not there:

 

https://forum.thaivisa.com/topic/1026614-when-buying-renting-commercial-premises-property-tax/

[smutcakes]

Property tax legally speaking is a landlord tax. In practice, in most cases the tenant pays it, and it should be dealt with in your contract. The authorities dont care who pays, landlord or tenant as long as they get it.

 

You should raise this with your LL if it is not dealt with as the basis of the property tax will change from January 2020, which might make it a more substantial amount to pay.

 

Currently its 12.5% of the rental portion of your lease contract. Next year it will be based on the assessed value of the property.

[Kwasaki]

14 hours ago, ghworker2010 said:

The following week the district office called our employee asking about the property tax....

I suppose areas of Thailand differ, I learnt years ago my wife has a kind of leasehold awaiting deeds because we are in an area owed by the Monarch. 

My wife pays property tax 8 baht per year for the house. 

The small piece of farmland outside the village 9 baht per year. 

[khunPer]

20 hours ago, ghworker2010 said:

Is this something that we as a tenant has to pay or does the landlord traditionally pay this? If its not in our contract then should we be asking him to pay half. The landlord kind of let our attorney draft the contract and I can't remember anything about this tax.

Should be part of contract, if you are going to pay it. However, on farmland – that's also kind of business – the standard contract says that the renter/lessor pay taxes.

 

I found these Q & A about tax:

Quote

Are there any property taxes when renting/ leasing property?

There is a property tax collected at the rate of 12.5% over the yearly rental or assessed rent price when a building/ apartment is leased. This tax is governed by the Land and House tax Act B.E. 2475. Income from renting out a property is governed by the section 'personal income tax' in the revenue code. When the lease must be registered there is also a lease registration fee of 1% and a stamp duty of 0.1% over the total rental throughout the lease term, charged by the land office upon registration.

 

Can I lease from my company?

This is a common structure when real estate is owned on the name of a Thai company. It will show in the books accounting of the company. But whether you lease from the company or not, or whether or not rent is paid to the company, building and land tax must be paid by the company when the property is used as a residence.

Source: "Lease rent and tenancy Questions and Answers"

 

You should ask your lawyer, as he made the contract.

[inThailand]

Can we please hear from someone who actually has experience and just doesn't regurate old posts? 

[smutcakes]

11 hours ago, inThailand said:

Can we please hear from someone who actually has experience and just doesn't regurate old posts? 

I deal with this on a day to day basis and have replied above.

 

1. Property Tax is a landlord tax

2. However the authorities dont care if landlord or lessee pays it.

3. Market standard is that the tenant absorbs the property tax

4. It should be dealt with in the contract.

5. If not then you will have to discuss it with you LL like adults.

 

What else do you want to know?

[thaibutty]

On 4/8/2019 at 9:31 PM, davidst01 said:

I found this link but its old:

 

 

Anyone have any recent info on this subject?

We had looked quite a bit back than and it seemed 95% of all landlords for smaller office space where not willing to pay the taxes themselves. We later found office space where the landlord covered the tax himself. Recently been looking again and same problem.

From my experience it is exactly as described by @smutcakes

 

Property tax is landlord tax. However, they try to get away without paying any tax (most don`t report the rental income either) so they will ask you to pay for it.

It´s your choice if you are willing to pay or not. In case you aren`t willing to pay you will have a hard time finding any office space.