Thailand Rental Income Guide

Rental Income and IIT — Progressive Rates (0% to 35%)

• Taxable income — the net rental income: The rental income from the land, the buildings, the houses, the condominium units, and the other real estate is classified as the "assessable income" under Section 40(5) of the Revenue Code. The gross rental income is reduced by the allowable deductions to arrive at the net rental income, which is then taxed at the progressive PIT rates.
• Progressive rates for 2026: The PIT rates for the 2026 tax year are: 0% for the income up to THB 150,000; 5% for THB 150,001–THB 300,000; 10% for THB 300,001–THB 500,000; 15% for THB 500,001–THB 750,000; 20% for THB 750,001–THB 1,000,000; 25% for THB 1,000,001–THB 2,000,000; 30% for THB 2,000,001–THB 5,000,000; and 35% for the income exceeding THB 5,000,000.

Standard Deduction — 30% vs Actual Costs

• Standard deduction — 30%: The rental income under Section 40(5) qualifies for the standard deduction of 30% of the gross rental income. The deduction covers the deemed costs of the maintenance, the repairs, the management, the insurance, and the depreciation. The taxpayer may claim the 30% deduction without providing the supporting documents.
• Actual costs (itemised deduction): The taxpayer may elect to deduct the actual costs instead of the 30% standard deduction. The actual costs may include: the building depreciation (the "wear and tear"), the repair and the maintenance, the insurance premiums, the property management fees, the land and building tax, the interest on the mortgage loan (if the property is used to generate the rental income), and the utilities.
• Election: The election between the standard deduction and the actual costs is made on the PIT return (PND 90). The taxpayer may choose the more favourable method each year. Once the actual cost method is elected, the taxpayer must maintain the detailed records and the receipts for all the claimed expenses.

For example: a landlord receiving THB 600,000 in the gross rental income may deduct 30% (THB 180,000) and pay the tax on THB 420,000 at the progressive rates. If the actual costs are THB 200,000, the taxpayer may elect the actual costs to reduce the taxable income to THB 400,000.

Withholding Tax — 5% on Rent Paid by Juristic Persons

• WHT rate — 5%: When the juristic person (the company) pays the rent to the individual landlord, the company must deduct the withholding tax at the rate of 5% of the gross rental amount. The company issues the withholding tax certificate (the "PND 53 certificate" — หนังสือรับรองการหักภาษี ณ ที่จ่าย) to the landlord.
• Credit against the annual PIT: The 5% WHT deducted by the tenant is treated as the tax credit in the landlord's annual PIT return (PND 90). If the landlord's marginal tax rate is lower than 5%, the excess WHT is refundable. If the marginal rate is higher than 5%, the landlord pays the difference.
• Exemption for individuals: The individual tenants are NOT required to deduct the WHT on the rent paid to the individual landlords. The WHT applies only when the tenant is a juristic person (or the other entity required to deduct the WHT).

No Special Property Tax on Rental

Thailand does NOT impose a special property tax (a "taxe foncière" or a "council tax") on the rental of the residential or the commercial properties. The only property-related taxes are: (a) the Land and Building Tax (ภาษีที่ดินและสิ่งปลูกสร้าง) — an annual tax on the ownership of the land and the buildings at the rate of 0.02% to 0.1% (for the residential properties) and up to 1.2% (for the commercial properties), assessed by the local administrative organisation; and (b) the Transfer Fee (ค่าธรรมเนียมการโอน) at 2% of the appraised value on the sale of the property. The Land and Building Tax is deductible as an actual expense against the rental income.

FAQs

Is the rental deposit taxable?

The rental deposit (the "security deposit") is NOT taxable at the time of the receipt because it is a refundable deposit. If the deposit is forfeited (e.g., due to the damage or the default), the forfeited amount becomes the taxable income in the year of the forfeiture.

Can the mortgage interest be deducted?

Yes. If the property is used to generate the rental income, the interest on the mortgage loan is deductible as an actual cost. The principal repayment is NOT deductible — only the interest portion. The taxpayer must elect the actual cost method to claim the mortgage interest deduction.