Letting a Room, Taxation

[Chuckles78]

Whats the tax rules here if you let a room in your house?

I'm guessing a tax return needs to be filed. Whats the average cost for a local accountant doing this?

Cheers.

[Torrens54]

Shush!

[gk10002000]

Obviously this is very common all over the world. I typically share a place while I am working on the road. I don't particularly care what the landlord or owner does with the money I pay. I am sure in many cases they are not reporting the rental money as income even though they are required to account for the money if they do their taxes properly. Once or twice when I had an issue I would drop a not so subtle hint that the IRS might want to know about the unreported income they were receiving. Funny how things usually worked out after that.

[johninbkk]

Shush!

EXACTLY....

[cheeryble]

Highly unlikely you get enough income from one room to pay tax.

Very few people here pay tax and tax authorities here are quite lenient it seems, but if you feel the need:

With 30% blanket deduction on rentals, plus allowances for wife/parents/pension fund etc, and tax free band you need to be making about 25,000bt/month every month of the year before you even think about tax.

Are you above this?

Edited February 25, 2015 by cheeryble

[MauiSteveBKK]

Are you crazy?

First I've heard of a man in LOS that "offers" to pay tax.

Each day in BKK, I see 57,342 food carts -- on just Sukhumvit Road alone -- and

I believe nary a one of them is paying any tax.

But go ahead and do it.

I pat you on the back .... but question your thinking.

[nithisa78]

If you owe tax, best idea is to pay it now. Too expensive to pay later.

[realenglish1]

The tax threshold is somewhere above 10,000 baht per month. So if your rental fee is less than that then you are fine Just ask an accountant what the threshhold is

I don't think the rental will be that much

[peterb17]

Are you crazy?

First I've heard of a man in LOS that "offers" to pay tax.

Each day in BKK, I see 57,342 food carts -- on just Sukhumvit Road alone -- and

I believe nary a one of them is paying any tax.

But go ahead and do it.

I pat you on the back .... but question your thinking.

That's a very precise number, did you count them?

[georgemandm]

Are you mad why would you say something , do you see thais who work for cash saying to the tex man I want to pay tax I think not look and how meany food places around thailand and I bet you most don't pay tax I see it in my village how meany don't pay tax .

[minikev]

It may be considered as work as it supplies an income and then you will need a work permit. Be carefull

[cheeryble]

The tax threshold is somewhere above 10,000 baht per month. So if your rental fee is less than that then you are fine Just ask an accountant what the threshhold is

I don't think the rental will be that much

Why did you suggest 10,000 pm....a stab in the dark?

For rentals and allowing for 30% blanket reduction for expenses and then there are allowances the figure is nearer 25kpm if no vacancies.

Above that the first tax band is only 5%, but it would be an extraordinary room to go higher.

Edited February 25, 2015 by cheeryble

[Liquorice]

realenglish1, on 25 Feb 2015 - 11:37, said:realenglish1, on 25 Feb 2015 - 11:37, said:realenglish1, on 25 Feb 2015 - 11:37, said:

The tax threshold is somewhere above 10,000 baht per month. So if your rental fee is less than that then you are fine Just ask an accountant what the threshhold is

I don't think the rental will be that much

The threshold is 20,000 baht per month according to my tax office.

My only Thai income is from the interest on my Deposit Account which gets taxed. I claim it back every January.

As long as your rental agreement doesn't forbid sub letting to share, then you certainly don't have to declare it for tax, unless your sharing a Palace and charge your tenant over 20,000 baht a month.

Any income under 20,000 baht your wasting the tax offices resources even completing a tax form. They're not interested.

Edited February 25, 2015 by Faz

[Arkady]

The tax threshold is somewhere above 10,000 baht per month. So if your rental fee is less than that then you are fine Just ask an accountant what the threshhold is

I don't think the rental will be that much

Why did you suggest 10,000 pm....a stab in the dark?

For rentals and allowing for 30% blanket reduction for expenses and then there are allowances the figure is nearer 25kpm if no vacancies.

Above that the first tax band is only 5%, but it would be an extraordinary room to go higher.

To claim a deduction for expenses, you have to have registered with the Revenue Department as a sole proprietorship business which is illegal for foreigners because they can only work in other people's businesses with work permits. However, there are some special tax rules regarding rented property which result in landlords doing odd things like making you sign a separate contract to rent non-existent furniture for more than the space.

It would be possible to declare the income gross without expense deduction in a PNG 90 tax return form. You can a basic personal allowance of B30k year plus a further deduction of B60k or 40% whichever is less. Net of these deductions income tax starts at B150,000 a year.

[MiKT]

555........................................5

[vaultdweller0013]

The tax threshold is somewhere above 10,000 baht per month. So if your rental fee is less than that then you are fine Just ask an accountant what the threshhold is

I don't think the rental will be that much

Why did you suggest 10,000 pm....a stab in the dark?

For rentals and allowing for 30% blanket reduction for expenses and then there are allowances the figure is nearer 25kpm if no vacancies.

Above that the first tax band is only 5%, but it would be an extraordinary room to go higher.

To claim a deduction for expenses, you have to have registered with the Revenue Department as a sole proprietorship business which is illegal for foreigners because they can only work in other people's businesses with work permits. However, there are some special tax rules regarding rented property which result in landlords doing odd things like making you sign a separate contract to rent non-existent furniture for more than the space.

It would be possible to declare the income gross without expense deduction in a PNG 90 tax return form. You can a basic personal allowance of B30k year plus a further deduction of B60k or 40% whichever is less. Net of these deductions income tax starts at B150,000 a year.

There are personal income tax deductions for income from letting property on hire:

http://www.rd.go.th/publish/6045.0.html

Assuming it qualified as a "building" the deduction would be 30%; otherwise it would be 10%.

[Chuckles78]

Thanks for the tips. I will not be letting it, but my thai wife rather as I may not generate income in thailand. It seems we may be under the tax threshold.

[davidst01]

op has to be a troll. No one with any common sense would ask a question like this. Go back to the nanny state that you came from op

[MiKT]

While we are talking about tax, how much tax did Suthep et al (especially his monky mate) pay on all those lovely wonga's they had by the basket load last year?

Mmmmmmmmmm bet this gets bounced!

[Chuckles78]

op has to be a troll. No one with any common sense would ask a question like this. Go back to the nanny state that you came from op

Rude and wrongful assumptions. Got out on the wrong side of bed today?

I happen to have purchased a big house which has a very nice guesthouse which people are interested in renting. But since I don't have a work Visa I'm not allowed to generate income. Yet my wife may.

So whats wrong with asking some tips from expats before deciding if i need an accountant.

[MiKT]

op has to be a troll. No one with any common sense would ask a question like this. Go back to the nanny state that you came from op

Rude and wrongful assumptions. Got out on the wrong side of bed today?

I happen to have purchased a big house which has a very nice guesthouse which people are interested in renting. But since I don't have a work Visa I'm not allowed to generate income. Yet my wife may.

So whats wrong with asking some tips from expats before deciding if i need an accountant.

[questionsreplies]

Stop dreaming, you cannot let anything as you dnt even own the house, only your wife can and she can even ask you to leave !

op has to be a troll. No one with any common sense would ask a question like this. Go back to the nanny state that you came from op

Rude and wrongful assumptions. Got out on the wrong side of bed today?

I happen to have purchased a big house which has a very nice guesthouse which people are interested in renting. But since I don't have a work Visa I'm not allowed to generate income. Yet my wife may.

So whats wrong with asking some tips from expats before deciding if i need an accountant.

[Chuckles78]

Stop dreaming, you cannot let anything as you dnt even own the house, only your wife can and she can even ask you to leave !

You obviously don't know what you are talking about.

House is in my name.

[MiKT]

Stop dreaming, you cannot let anything as you dnt even own the house, only your wife can and she can even ask you to leave !

You obviously don't know what you are talking about.

House is in my name.

Sorry for so many unhelpful replies,

A famous British judge said in 1929 “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.”

Whilst this principal may not apply verbatim under Thai law, Thai tax shovels are notoriously leaky; and whilst I am absolutely sure that the furthest thing from the mind of any Thai Visa correspondent would be to encourage you to avoid (or evade) paying tax in Thailand; it's just that the idea of anybody who does not already run a registered business voluntarily paying tax in Thailand (or elsewhere for that matter) is quite amusing.

However, I digress; the purpose of this post is to humbly enquire how you managed to get a House (presuming you mean a House as opposed to a Condo) registered in your name (as opposed to your wife’s/siblings name/s)?

NB for the benefit of those whose sensibilities are offended by this sort of perversion of English grammar, capitalisation was quite unnecessarily added to emphasis the difference between a house and a condo.

[Chuckles78]

Stop dreaming, you cannot let anything as you dnt even own the house, only your wife can and she can even ask you to leave !

You obviously don't know what you are talking about.

House is in my name.

Sorry for so many unhelpful replies,

A famous British judge said in 1929 “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.”

Whilst this principal may not apply verbatim under Thai law, Thai tax shovels are notoriously leaky; and whilst I am absolutely sure that the furthest thing from the mind of any Thai Visa correspondent would be to encourage you to avoid (or evade) paying tax in Thailand; it's just that the idea of anybody who does not already run a registered business voluntarily paying tax in Thailand (or elsewhere for that matter) is quite amusing.

However, I digress; the purpose of this post is to humbly enquire how you managed to get a House (presuming you mean a House as opposed to a Condo) registered in your name (as opposed to your wife’s/siblings name/s)?

NB for the benefit of those whose sensibilities are offended by this sort of perversion of English grammar, capitalisation was quite unnecessarily added to emphasis the difference between a house and a condo.

Hi MiKT,

Thanks for your post. Yes i do mean house.

Foreigners may own property but not land. Please see this post...

http://property.thaivisa.com/can-foreigners-property-thailand/

For those worried about being kicked off the land by their partners a usufruct can be placed on the land permitting you to stay, even sublet until the usufructs expiry.

[MiKT]

Stop dreaming, you cannot let anything as you dnt even own the house, only your wife can and she can even ask you to leave !

You obviously don't know what you are talking about.

House is in my name.

Sorry for so many unhelpful replies,

A famous British judge said in 1929 “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.”

Whilst this principal may not apply verbatim under Thai law, Thai tax shovels are notoriously leaky; and whilst I am absolutely sure that the furthest thing from the mind of any Thai Visa correspondent would be to encourage you to avoid (or evade) paying tax in Thailand; it's just that the idea of anybody who does not already run a registered business voluntarily paying tax in Thailand (or elsewhere for that matter) is quite amusing.

However, I digress; the purpose of this post is to humbly enquire how you managed to get a House (presuming you mean a House as opposed to a Condo) registered in your name (as opposed to your wife’s/siblings name/s)?

NB for the benefit of those whose sensibilities are offended by this sort of perversion of English grammar, capitalisation was quite unnecessarily added to emphasis the difference between a house and a condo.

Hi MiKT,

Thanks for your post. Yes i do mean house.

Foreigners may own property but not land. Please see this post...

http://property.thaivisa.com/can-foreigners-property-thailand/

For those worried about being kicked off the land by their partners a usufruct can be placed on the land permitting you to stay, even sublet until the usufructs expiry.

Hello Dieter78,

Thank You very much for your reply. I was rather hoping this was the case as I am interested in that post on usufructs (for inheritance purposes rather than the insipient boot - at least so far) and lost track of the name somehow.

Out of real interest (my wife and I are currently building a resort) would I be correct in assuming from all the above posts that you will not be opening a business letting rooms under your name and if this happens it will be done under your wifes name, who (if necessary) will register a business and (if necessary) pay some sort of business related tax rather than personal income tax?

In the UK you can deduct a lot of expenses if you are letting a room in your house (and are not part of a special scheme that makes your income tax free if it is less than 4,250 UK pounds PA).

The deduct allowable expenses are:

• Letting agents' fees
• Legal fees for lets of a year or less, or for renewing a lease for less than 50 years
• Accountancy fees
• Buildings and contents insurance
• Interest on property loans
• Maintenance and repairs (but not improvements)
• Utility bills
• Rent, ground rent, service charges
• Council Tax
• Services you pay for, such as cleaning
• Direct costs of letting the property, such as phone calls, stationery and advertising

Presumably at least some of these would also be deductables in Thailand.

I also presume, that even in Thailand it would be good to have an accountant look at your business set-up, if only for the first tax return.

Thanks again for your good info.

[Chuckles78]

Stop dreaming, you cannot let anything as you dnt even own the house, only your wife can and she can even ask you to leave !

You obviously don't know what you are talking about.

House is in my name.

Sorry for so many unhelpful replies,

A famous British judge said in 1929 “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.”

Whilst this principal may not apply verbatim under Thai law, Thai tax shovels are notoriously leaky; and whilst I am absolutely sure that the furthest thing from the mind of any Thai Visa correspondent would be to encourage you to avoid (or evade) paying tax in Thailand; it's just that the idea of anybody who does not already run a registered business voluntarily paying tax in Thailand (or elsewhere for that matter) is quite amusing.

However, I digress; the purpose of this post is to humbly enquire how you managed to get a House (presuming you mean a House as opposed to a Condo) registered in your name (as opposed to your wife’s/siblings name/s)?

NB for the benefit of those whose sensibilities are offended by this sort of perversion of English grammar, capitalisation was quite unnecessarily added to emphasis the difference between a house and a condo.

Hi MiKT,

Thanks for your post. Yes i do mean house.

Foreigners may own property but not land. Please see this post...

http://property.thaivisa.com/can-foreigners-property-thailand/

For those worried about being kicked off the land by their partners a usufruct can be placed on the land permitting you to stay, even sublet until the usufructs expiry.

Hello Dieter78,

Thank You very much for your reply. I was rather hoping this was the case as I am interested in that post on usufructs (for inheritance purposes rather than the insipient boot - at least so far) and lost track of the name somehow.

Out of real interest (my wife and I are currently building a resort) would I be correct in assuming from all the above posts that you will not be opening a business letting rooms under your name and if this happens it will be done under your wifes name, who (if necessary) will register a business and (if necessary) pay some sort of business related tax rather than personal income tax?

In the UK you can deduct a lot of expenses if you are letting a room in your house (and are not part of a special scheme that makes your income tax free if it is less than 4,250 UK pounds PA).

The deduct allowable expenses are:

• Letting agents' fees
• Legal fees for lets of a year or less, or for renewing a lease for less than 50 years
• Accountancy fees
• Buildings and contents insurance
• Interest on property loans
• Maintenance and repairs (but not improvements)
• Utility bills
• Rent, ground rent, service charges
• Council Tax
• Services you pay for, such as cleaning
• Direct costs of letting the property, such as phone calls, stationery and advertising

Presumably at least some of these would also be deductables in Thailand.

I also presume, that even in Thailand it would be good to have an accountant look at your business set-up, if only for the first tax return.

Thanks again for your good info.

Hi MikT,

Yes you are correct in your assumption that I will not be opening a business to let out our guest house.

In the end we weighed up all the pros and cons and we decided to keep it available solely for our family and friends. We had an offer from guests who stayed with the previous owners but also the potential rental return was not persuasive enough.

My lawyer came up with the suggestion of the usufruct, but it was not specifically for inheritance. I am also interested in the inheritance legalities to ensure any of our assets go to our children as opposed to relatives but I believe there are lawyers specialising in this field and I haven't done this yet.

If you are in Hua hin i can recommend a good law firm to you.

[MiKT]

Stop dreaming, you cannot let anything as you dnt even own the house, only your wife can and she can even ask you to leave !

You obviously don't know what you are talking about.

House is in my name.

Sorry for so many unhelpful replies,

A famous British judge said in 1929 “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.”

Whilst this principal may not apply verbatim under Thai law, Thai tax shovels are notoriously leaky; and whilst I am absolutely sure that the furthest thing from the mind of any Thai Visa correspondent would be to encourage you to avoid (or evade) paying tax in Thailand; it's just that the idea of anybody who does not already run a registered business voluntarily paying tax in Thailand (or elsewhere for that matter) is quite amusing.

However, I digress; the purpose of this post is to humbly enquire how you managed to get a House (presuming you mean a House as opposed to a Condo) registered in your name (as opposed to your wife’s/siblings name/s)?

NB for the benefit of those whose sensibilities are offended by this sort of perversion of English grammar, capitalisation was quite unnecessarily added to emphasis the difference between a house and a condo.

Hi MiKT,

Thanks for your post. Yes i do mean house.

Foreigners may own property but not land. Please see this post...

http://property.thaivisa.com/can-foreigners-property-thailand/

For those worried about being kicked off the land by their partners a usufruct can be placed on the land permitting you to stay, even sublet until the usufructs expiry.

Hello Dieter78,

Thank You very much for your reply. I was rather hoping this was the case as I am interested in that post on usufructs (for inheritance purposes rather than the insipient boot - at least so far) and lost track of the name somehow.

Out of real interest (my wife and I are currently building a resort) would I be correct in assuming from all the above posts that you will not be opening a business letting rooms under your name and if this happens it will be done under your wifes name, who (if necessary) will register a business and (if necessary) pay some sort of business related tax rather than personal income tax?

In the UK you can deduct a lot of expenses if you are letting a room in your house (and are not part of a special scheme that makes your income tax free if it is less than 4,250 UK pounds PA).

The deduct allowable expenses are:

• Letting agents' fees
• Legal fees for lets of a year or less, or for renewing a lease for less than 50 years
• Accountancy fees
• Buildings and contents insurance
• Interest on property loans
• Maintenance and repairs (but not improvements)
• Utility bills
• Rent, ground rent, service charges
• Council Tax
• Services you pay for, such as cleaning
• Direct costs of letting the property, such as phone calls, stationery and advertising

Presumably at least some of these would also be deductables in Thailand.

I also presume, that even in Thailand it would be good to have an accountant look at your business set-up, if only for the first tax return.

Thanks again for your good info.

Hi MikT,

Yes you are correct in your assumption that I will not be opening a business to let out our guest house.

In the end we weighed up all the pros and cons and we decided to keep it available solely for our family and friends. We had an offer from guests who stayed with the previous owners but also the potential rental return was not persuasive enough.

My lawyer came up with the suggestion of the usufruct, but it was not specifically for inheritance. I am also interested in the inheritance legalities to ensure any of our assets go to our children as opposed to relatives but I believe there are lawyers specialising in this field and I haven't done this yet.

If you are in Hua hin i can recommend a good law firm to you.

Thanks again Dieter,

Yes, have to take care that the inheritance goes to the 10 dogs + 1 cat, sorry, I mean, goes to "the kids".

Actually the resort is in Buri Ram (near the new race track) but thanks very for the offer, good lawyers are harder to find than people who want to pay tax.

I don't expect that taking in the odd paying guest will cause the tax authorities to descend upon you with drawn guns, slavering dogs, handcuffs and deportation orders - after all it's not the USA (not too sure about the new gov though!).

As you live in Hua Hin, you can probably let rooms to polo players groupies. mmmm, maybe check with "she who must" first.

Good Luck