Many purchasers of real estate in Thailand are not using their newly purchased home as a permanent personal residence. Such assets are often meant to be used as a holiday home only and are unoccupied for the remainder of the year. One of the ongoing financial burdens of owning a holiday home is the common area fee. Such a fee is usually connected to the ownership of such a holiday home and is payable even if the purchaser does not use his asset. In order to “cover the losses” or to receive a return of investment some purchasers are willing to rent out their holiday home for a limited time and therefore “earn” income from their asset. Such owners must be aware of the taxation issues connected to the lease income from such a holiday home. This article will discuss the taxation of individuals who own real estate in Thailand and who receive rental income from renting out the property.

It is a common misunderstanding that foreigners are per se restricted from owning land in Thailand. One of the most interesting exceptions from the restrictions of foreign ownership of land in Thailand has been enacted for foreigners who bring at least Thai baht forty million equivalent into Thailand for certain prescribed investments. Such foreigner may apply for freehold ownership of up to 1,600 square meters of land under the rules, procedures and conditions prescribed by Section 96(bis) of the Land Code (as amended by the Land Code Amendment Act No. 8 (1999)) and in the 2002 Ministerial Regulation issued under the Act.

The Phuket property market is recovering from the Global Financial Crisis but has yet to bounce back to the boom levels of 2007, a recent report from Colliers Thailand has found. The report made not of the distinction between inland areas of Phuket, which contain the vast majority of units, and the coastal areas, which contain less properties but have higher capital values. 2010 was one of the rare years when more condominium units were supplied than landed properties, which usually dominate the market. Around 1,020 units were supplied for 2010 while up to 200 units were supplied up to May in 2011. Most of the units are located inland and at present and the Thai domestic market is the main driver.