Tax issues for farang tourists renting out their Bangkok condo(s)

[Ganador]

Tax issues for farang tourists renting out their Bangkok condo(s)

Lets say I am a tourist in Bangkok and I buy one or two condos in Bangkok ... and I decide to rent them out.

Is it legal for a farang on a visa exempt (30 day) visit to do this?

And if it is permitted, then what is my Thailand tax obligation on this rental income?

[mike324]

Yes its fine, thousands of "tourist" or should I say investors that don't live in Thailand are doing it. Don't worry about the tax, no one is going to go after you, you are a small fish compare to the big fish that revenue department goes after.

[KittenKong]

I have a different take on that.

Yes, it's legal (though technically you should employ Thais to collect money or do repairs etc).

But I think that the Thai tax office will become progressively more and more interested in this sort of activity as not only do many people evade the tax due but it could also be considered as taking money away from Thais who would like to do the same thing.

[arunsakda]

So how is avoiding reporting income received in Thailand with no tax id and no tax payed legal?

There is no legal way to do it this way without leasing through an agency.

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[Searat7]

One of the taxes paid when you sell the condo is an income tax which is based on how many years you owned the condo.

[arunsakda]

Rubbish

[KittenKong]

So how is avoiding reporting income received in Thailand with no tax id and no tax payed legal?

There is no legal way to do it this way without leasing through an agency.

You misunderstand me.

The act of renting is legal. You dont need a work permit for this and can do it on a tourist visa, though as I mentioned you should not be collecting money or doing repairs yourself.

The act of evading tax is obviously not legal, which I why I suspect that the tax authorities will become more interested in it over time.

[arunsakda]

Correct. Many Thai people are not reporting rental income. Farangs do also and seem to get away with it. Others who think they are going to start a real estate empire casually buying/renting/flipping condos in CM get harrased by a bent cop until he shoves a gunbarrel into their mouth to "pay me every month or go to jail". (This is true). I bought a condo for my own use which is vacant much of the time. I don't really want to rent it anyway but many ask why I don't at least AirB&B it. There is just no way to do it legally without going through a Thai company and although I might err here or there I don't do illegal things on purpose. Do you know you cannot even transfer a condo to a Farang spouse in a will/estate without them making an absurd "legal fiction" of transferring funds from abroad. The entire system as usual is completely biased.

Don't invest more than one can afford to walk away from.

[KittenKong]

One of the taxes paid when you sell the condo is an income tax which is based on how many years you owned the condo.

This is true, but you pay this tax regardless of whether the condo was your own main residence or whether it was rented out or even whether you declared the rental income and paid tax on it every year.

In most countries such taxes are not applied to your main residence (or at least are applied with various generous deductions), and they are generally calculated on the capital gain (if any) rather than the capital value as they are here.

This is an odd tax that seems to encourage people to buy property, possibly to let it out without declaring the revenue and particularly to retain it indefinitely even if unused. I can think of much better ways of generating tax income from property.

[Ganador]

Thanks for all your replies. I appreciate your advices.

AS I do not live in Thailand, would you recommend leaving the condo with the juristic office (administration manager) on site

so that they will find the tenant and collect the rent every month?

Or would a Bangkok real estate office be a better option?

And does this juristic office or realtors deduct payment for the Thai tax office?

[gk10002000]

So how is avoiding reporting income received in Thailand with no tax id and no tax payed legal?

There is no legal way to do it this way without leasing through an agency.

You misunderstand me.

The act of renting is legal. You dont need a work permit for this and can do it on a tourist visa, though as I mentioned you should not be collecting money or doing repairs yourself.

The act of evading tax is obviously not legal, which I why I suspect that the tax authorities will become more interested in it over time.

I don't think the act of renting is technically legal. It is "working" isn't it? It is running a business, part time or otherwise isn't it? Work Permit, proper visa etc. are technically needed? Yes I know many many people on all sorts of visas own and rent out property.

[KittenKong]

I don't think the act of renting is technically legal. It is "working" isn't it? It is running a business, part time or otherwise isn't it? Work Permit, proper visa etc. are technically needed? Yes I know many many people on all sorts of visas own and rent out property.

As I mentioned, if all you do is the renting (and not the money collection or repairs etc) then I personally dont think that you need a work permit for this, as you arent actually doing anything.

Of course the immigration police may have a different idea, but I cant speak for them.

[theguyfromanotherforum]

Yes its fine, thousands of "tourist" or should I say investors that don't live in Thailand are doing it. Don't worry about the tax, no one is going to go after you, you are a small fish compare to the big fish that revenue department goes after.

I liked your post because it is completely incorrect.

It is the small fish that revenue usually goes after, here or in the West.

[mike324]

Yes its fine, thousands of "tourist" or should I say investors that don't live in Thailand are doing it. Don't worry about the tax, no one is going to go after you, you are a small fish compare to the big fish that revenue department goes after.

I liked your post because it is completely incorrect.

It is the small fish that revenue usually goes after, here or in the West.

so how many folks have been fined and jailed by the revenue department for not paying their taxes from their rentals? Right must have been a lot......

[theguyfromanotherforum]

Governments rarely go after "big fish". It is much harder as big fish has money, lawyers and can hide money.

If there is ever a crackdown about rentals and taxes, rest assured "small fish" will be made examples of.

[mike324]

Governments rarely go after "big fish". It is much harder as big fish has money, lawyers and can hide money.

If there is ever a crackdown about rentals and taxes, rest assured "small fish" will be made examples of.

"big fish" I refer to was more a long the lines of small to medium business owners.... so yea a chap who owns one or two condo unit is small fish....but if you want to talk in terms of real estate, "big fish" in real estate world are people who own complate flats, small office blocks, warehouses, community malls, etc - So again revenue department won't crack down on the millions of condo unit owners in the country first....

[daviddabit]

Hi Gadanor

A quick answer to your question.

1. You can rent out the condo you bought in Bangkok and you do not need any work permit or visa for you to do so. You can rent out the condo as an individual even if you do not reside in Thailand (less than 180 days in calendar year).

2. You will still need to file personal tax return in Thailand for this rental income you earned. You will be taxed under non-resident tax. A tax file number will be given to you.

The above is based on the assumption you rented out your condo on long term basis e.g. one year lease or longer.

But, If you are renting out your condo on a daily basis or if you are actively seeking for people to rent out your condo regularly such as via Airbnb or facebook, newspaper, websites and etc., the tax treatment may be different where you may be deemed as running a business of letting property and the tax treatment will be totally different.

PM me if you want to know more.

[KittenKong]

Hi Gadanor

A quick answer to your question.

1. You can rent out the condo you bought in Bangkok and you do not need any work permit or visa for you to do so. You can rent out the condo as an individual even if you do not reside in Thailand (less than 180 days in calendar year).

2. You will still need to file personal tax return in Thailand for this rental income you earned. You will be taxed under non-resident tax. A tax file number will be given to you.

The above is based on the assumption you rented out your condo on long term basis e.g. one year lease or longer.

But, If you are renting out your condo on a daily basis or if you are actively seeking for people to rent out your condo regularly such as via Airbnb or facebook, newspaper, websites and etc., the tax treatment may be different where you may be deemed as running a business of letting property and the tax treatment will be totally different.

Aside from the tax situation, short-term condo rentals (less than 30 days) are not legal as they fall under the remit of the hotel act. The rules of most condo buildings, and the condo act, prohibit business activities in areas not specifically designated for this. Short-term letting is a business activity.

Sadly many buildings do not apply the law correctly, due to incompetent and lazy management and/or conflicts of interest.