Property tax, how to calculate it, regarding a house in a company

[britpop]

Hi, does anyone know how the tessa ban calculate the property tax that is related to the company that i have my house in which i bought 1 year ago, i live in Kathu and when i took the company over, i had it audited, the old share holders out and 2 new ones put in, i'm paying 21,000B in property tax a year, i went to pay my accountant fee's for the years books and mentioned the 21000B figure, they said to high, i'm just wondering how it's calculated, regards

[LivinginKata]

There is no fixed formula for property taxes in Kathu area. Rule of thumb is 12% or one and half month of rental income given that house is occupied all year round. And you must factor in that if a home is furnished then you only pay property tax on the building rental and not the furnishing part of the rental.

Also if you are using your company owned home for personal use and not making any rental income then you should not need to pay any property tax. It's a real mine field. Have to say that I agree with your accountants - 21,000 baht/year is too high. Our 2 bedroom townhouse rental properties only attract 7,000 baht/year in property tax.

[DiamondKing]

So there is no property tax in Thailand unless you rent out the property ????

[DJH77]

You have got to be kidding. Get your Tax Return done by your Lawyers office. I have been doing this for 10 years and never had a problem. I have the Land in a Company Name and the House in my Name. Land Value Approx 10 million baht, House value Approx 20 million baht. It cosys me around 15,000 baht to have my Tax Return done each year and my Tax Bill is around 200 baht. If you need a lawyer to do this for you pm me and i will give you the info. Good Luck.

[Nobbie49]

To: Livinginkata

Your second paragraph is, backed by my personal experience, not quite correct. If the house is in your company’s name and you, as a director or employee, reside in it, not only does the company have to pay property tax but as you are not paying rent you will be considered as receiving a benefit in kind and have to pay additional personal income tax based on 20% of your monthly salary or 20% of the annual depreciation of the house, whichever is HIGHER. This is how the Revenue extortionists interpreted my case. As I thought this was a rather outrageous interpretation I asked for evidence which of course they were able to provide. The law was, admittedly, quite clear on the subject. I ended up coughing up Bht 162,000 for 2012 only . I say only because they threatened that if I did not pay they would reassess me over the past 10 years which, again, they have the right to do. Can you say xenophobia?

[LivinginKata]

So there is no property tax in Thailand unless you rent out the property ????

Correct as far as I know.

[LivinginKata]

So there is no property tax in Thailand unless you rent out the property ????

Correct as far as I know.

Sorry, lost my interent connection. Start again. It's not so simple. For sure if Thai owned and occupied then no property tax is due. If Farang owned by virtue of a long lease or company then taxes will be due by the land lord or Thai holding company. I leave my Thai wife and co-director to deal with all the property tax issues by the Tesibaan office. She negiotiates the best deal she can, but year on year comes back to me to report that Tesibaan wants more tax year on year, despite our falling and documented rental revenue.

[LivinginKata]

To: Livinginkata

Your second paragraph is, backed by my personal experience, not quite correct. If the house is in your company’s name and you, as a director or employee, reside in it, not only does the company have to pay property tax but as you are not paying rent you will be considered as receiving a benefit in kind and have to pay additional personal income tax based on 20% of your monthly salary or 20% of the annual depreciation of the house, whichever is HIGHER. This is how the Revenue extortionists interpreted my case. As I thought this was a rather outrageous interpretation I asked for evidence which of course they were able to provide. The law was, admittedly, quite clear on the subject. I ended up coughing up Bht 162,000 for 2012 only . I say only because they threatened that if I did not pay they would reassess me over the past 10 years which, again, they have the right to do. Can you say xenophobia?

I don't doubt what you report. I did say at the outset - it's a mine field. And we each have to negotiate that mine field as best we can

[dotpoom]

I have a house in a company name.....no taxes to pay.....only pay the accountant his fee every January to do the books and send off to the relevant body.

[khunPer]

So there is no property tax in Thailand unless you rent out the property ????

Correct as far as I know.

–But you still have to pay “Land Tax”.

From what I have read, there are 2 taxes:

Land Tax,

and

Structure Usage Tax, “profit tax on buildings or house”.

Quote from Philip Bruce’s book “How to Buy Land and Build a House in Thailand”, page 70:

»Land Tax is levied on land ownership and is very small amount, in the order of a few hundred bath per Rai per year….«

»If a property is being used as a private residence, there is no property tax. If the property is being used for a commercial business, a Structure Usage Tax of 12.5% of the actual or assessed rentable value will be levied…«

(…however no guarantee that things may have been changed recently.)

[LivinginKata]

But you still have to pay Land Tax.

From what I have read, there are 2 taxes:

Land Tax,

and

Structure Usage Tax, profit tax on buildings or house.

Quote from Philip Bruces book How to Buy Land and Build a House in Thailand, page 70:

»Land Tax is levied on land ownership and is very small amount, in the order of a few hundred bath per Rai per year.«

»If a property is being used as a private residence, there is no property tax. If the property is being used for a commercial business, a Structure Usage Tax of 12.5% of the actual or assessed rentable value will be levied«

(however no guarantee that things may have been changed recently.)

Now that's a new one to me. For sure there is a tax if the owner sells on the land at a profit within 5 years. A sort of Capitol Gains tax. A Land Tax ?? don't know about that. My wife tells me that new rules might attract some smallish tax on land that we/she owns even if we leave the land undeveloped.

[NamKangMan]

To: Livinginkata

Your second paragraph is, backed by my personal experience, not quite correct. If the house is in your company’s name and you, as a director or employee, reside in it, not only does the company have to pay property tax but as you are not paying rent you will be considered as receiving a benefit in kind and have to pay additional personal income tax based on 20% of your monthly salary or 20% of the annual depreciation of the house, whichever is HIGHER. This is how the Revenue extortionists interpreted my case. As I thought this was a rather outrageous interpretation I asked for evidence which of course they were able to provide. The law was, admittedly, quite clear on the subject. I ended up coughing up Bht 162,000 for 2012 only . I say only because they threatened that if I did not pay they would reassess me over the past 10 years which, again, they have the right to do. Can you say xenophobia?

Was your "case interpreted" in a back room of Chalong Police Station?

[khunPer]

But you still have to pay Land Tax.

From what I have read, there are 2 taxes:

Land Tax,

and

Structure Usage Tax, profit tax on buildings or house.

Quote from Philip Bruces book How to Buy Land and Build a House in Thailand, page 70:

»Land Tax is levied on land ownership and is very small amount, in the order of a few hundred bath per Rai per year.«

»If a property is being used as a private residence, there is no property tax. If the property is being used for a commercial business, a Structure Usage Tax of 12.5% of the actual or assessed rentable value will be levied«

(however no guarantee that things may have been changed recently.)

Now that's a new one to me. For sure there is a tax if the owner sells on the land at a profit within 5 years. A sort of Capitol Gains tax. A Land Tax ?? don't know about that. My wife tells me that new rules might attract some smallish tax on land that we/she owns even if we leave the land undeveloped.

I do believe the “Land Tax” is very old – some village “land deeds” are nothing but tax receipts that the annual land tax has been paid for, can later be upgraded to a real, but lower deed. Farmers receiving support normally have to show the receipts for latest Land Tax being paid. Some – or most – Land Tax’s are very small; may even not be collected, but due (at Land Office?) when a property is sold or transferred.

Capital Gain Tax is when you sell something (land/property/stocks etc.) and gain a profit, depending if it’s business or private, and there are some deductions etc. depending how long time the items have been owned (a bit complicated, so I don’t know the details).

Furthermore you will pay a small Tax (around 1 percent) and a Transfer Fee of the total (registered) value at Land Office when you sell/transfer land/property.

Edited April 23, 2014 by khunPer

[nedkellylives]

The Op should just find a decent honest accounting firm ,, fees for company with house should be 15K baht a year

[Old Croc]

So, as a quick guide, land tax on a company owned house is somewhere between nil and 162,000 baht.

[keestha]

Maybe irrelevant because I am Phangnga based, but this year I paid 34425 Baht for a 15 room hotel + restaurant. They calculate on the basis of room prices and the size of the restaurant.

[britpop]

There is no fixed formula for property taxes in Kathu area. Rule of thumb is 12% or one and half month of rental income given that house is occupied all year round. And you must factor in that if a home is furnished then you only pay property tax on the building rental and not the furnishing part of the rental.

Also if you are using your company owned home for personal use and not making any rental income then you should not need to pay any property tax. It's a real mine field. Have to say that I agree with your accountants - 21,000 baht/year is too high. Our 2 bedroom townhouse rental properties only attract 7,000 baht/year in property tax.

Thanks LIK, even my accountant says the 21000B is to high, I went to the tessa ban and if you can believe it, there mentality is because the previous owner paid the 21000B, it must be correct, my accounts show a income of 60,000B rental income per year, I think the company has to show some income, that can be written off, so that 5000B per month, so going by the 1 1/2 monthly income to pay, on paper it should be 7500B Edited April 28, 2014 by britpop