Economy Land and Building Tax Pressures Prompt Property Shifts in Thailand

[snoop1130]

File photo for reference only

 

Thailand's land and building tax continues to exert pressure on outdated and less competitive properties, driving many owners to sell or lease assets in the tourism market. This trend is particularly evident among older offices, apartments, and hotels, which face heightened financial burdens due to the tax's calculation based on appraised property values.

 

Wutthiphon Taworntawat, managing director at UHG, notes that the tax has led many landlords to reconsider their property strategies. For older hotels and apartments, the decision to lease or sell becomes increasingly attractive when faced with high renovation costs and limited financial returns. Smaller hotel operators, especially those with just one or two properties, are opting out of the market as their scale proves unsustainable in the current climate.

 

Office landlords also contend with the challenge of attracting tenants amid an oversaturated market offering more competitive options. UHG is engaging with landlords of outdated properties in city fringe areas, planning to convert them into modern hotels through long-term leases and renovations.

 

Phattarachai Taweewong from Colliers Thailand underscores the strategic timing for hotel owners to sell, with tourism recovery elevating property values. By selling now, owners can bypass renovation expenses and reallocate assets, reflecting a shift from viewing hotels solely as income sources to actively managed investments.

 

In markets such as Bangkok, Pattaya, Chiang Mai, and Hua Hin, the need for major renovations is prompting asset sales, aided by the robust tourism sector. The fixed nature of the tax forces owners to reassess property utilization, potentially leading to more property transfers or repurposing this year.

 

Large assets taxed at commercial rates face increased pressure, especially without income or renovation plans. Rising costs and competition from new developments further impact yields and long-term viability.

 

Surachet Kongcheep from Cushman & Wakefield Thailand highlights that many hotel owners, having endured multiple crises, are considering exiting the business, particularly if recent earnings have fulfilled investment objectives. Satisfied with offered prices, some owners choose to sell, a trend that has accelerated post-pandemic amid financial struggles.

 

Thailand's hospitality sector has historically faced numerous challenges, with hotel room rates struggling to climb significantly due to recurring political uncertainties and crises. As the market begins to recover, this history of volatility continues to influence ownership decisions, leading some to seek more stable investment opportunities.

 

  Adapted by ASEAN Now from Bangkok Post 2025-05-13

 

 

[norsurin]

So the indians and Chinese didn't come and resque the tourism?

[hotandsticky]

2 minutes ago, norsurin said:

So the indians and Chinese didn't come and resque the tourism?

 

 

No

 

Do you understand the concept of zero Dollar tours.

 

Both groups tend to move in large numbers and when you have that it also impacts on the general ambience of a place. 

[norsurin]

18 minutes ago, hotandsticky said:

 

 

No

 

Do you understand the concept of zero Dollar tours.

 

Both groups tend to move in large numbers and when you have that it also impacts on the general ambience of a place. 

I know what u mean.Anyway TAT is living on a dream on daily basis.

[hotandsticky]

Just now, norsurin said:

I know what u mean.Anyway TAT is living on a dream on daily basis.

 

 

I am sure that in Surin you are unaffected by these issues.

[norsurin]

33 minutes ago, hotandsticky said:

 

 

I am sure that in Surin you are unaffected by these issues.

Haven't live there for many years.But i visit my kids grandparents everytime im back in Thailand.Just few hours though.