Rentals & investment
Long-Term or Short-Term Rental: What Is Allowed and How to Pay Tax
You can rent out a condo in Thailand, but long-term and short-term rentals are treated very differently by law. We look at what the Hotel Act says, where the line is drawn and what tax you pay on the income.
In short
- Renting with monthly or longer payments is not a hotel business under the Hotel Act.
- Nightly rentals without a hotel license break the law: a fine of up to 20,000 ฿ plus up to 10,000 ฿ for each day.
- Rental income is taxed at 0 to 35%, after a 30% deduction for expenses.
What the Hotel Act says
The Hotel Act B.E. 2547 (2004) defines a hotel as any paid temporary accommodation. But the law has an important exception: accommodation rented out with monthly or longer payments is not a hotel. That is exactly why a long-term rental of a month or more does not require a hotel license.
Renting to tourists by the night or by the week is legally closer to running a hotel, and doing it without a license is prohibited.
- Without a license
- up to 1 year in prison or a fine of up to 20,000 ฿, or both
- Plus for each day of violation
- up to 10,000 ฿
These are the penalties under Section 59 of the Hotel Act. In practice, cases over nightly condo rentals have reached court: in 2018 a court in Hua Hin fined condo owners who had been renting their units by the night without a license.
Building rules come first
On top of the law, each condominium has its own rules (regulations). Many buildings explicitly ban short-term rentals; others allow them through their own service or a licensed operator. Some complexes are built from the start as condo-hotels with a hotel operator.
Long-term rental: the most straightforward model
- a contract of a month or more, usually 6 or 12 months;
- a deposit, typically 1–2 months;
- utilities are paid by the tenant;
- demand is steadier, with less wear on the unit and less hassle.
The income is lower than a successful run of nightly rentals in high season, but more predictable. A sample calculation is in the article Investing in a condo in Pattaya.
Tax on rental income
Income from renting out a condo in Thailand is subject to personal income tax. Rent from a Thai property is income from Thailand, so both residents and non-residents pay the tax.
- Expense deduction. From income on renting a building you can deduct 30% without proof of expenses.
- Scale. Progressive, from 0% on income up to 150,000 ฿ a year to 35% on income above 4 million ฿.
- If the tenant is a company. The company withholds 5% tax from the rent and remits it itself.
- Resident. You are a tax resident if you spend more than 180 days in Thailand in a calendar year.
| Annual taxable income | Rate |
|---|---|
| Up to 150,000 ฿ | 0% |
| 150,001–300,000 ฿ | 5% |
| 300,001–500,000 ฿ | 10% |
| 500,001–750,000 ฿ | 15% |
| 750,001–1,000,000 ฿ | 20% |
| 1,000,001–2,000,000 ฿ | 25% |
| 2,000,001–4,000,000 ฿ | 30% |
| Over 4,000,000 ฿ | 35% |
In addition to the 30% deduction, an individual can claim personal allowances. For an exact calculation for your situation, it is best to work with an accountant in Thailand.
Who manages the rental
If you do not live in Thailand, it makes sense to hand the rental over to a management company: finding tenants, the contract, rent collection, cleaning, minor repairs and reporting. Avalon helps you rent out your condo after purchase and can take it under management.
FAQ
Can you rent out a condo in Thailand by the night?
Only with a hotel license and if the building rules allow it. Renting with monthly or longer payments is not considered a hotel business under the Hotel Act.
What is the fine for nightly rentals without a license?
Under Section 59 of the Hotel Act: up to 1 year in prison or a fine of up to 20,000 ฿, plus up to 10,000 ฿ for each day of violation.
What tax do you pay on rental income?
Personal income tax on a scale from 0 to 35% after a 30% deduction for expenses. If the tenant is a company, it withholds 5% itself.
Sources
- Hotel Act B.E. 2547 (2004), official English translation, sections 4, 15 and 59
- Revenue Department: personal income tax rates and deductions
- Khaosod English: Hua Hin court ruling on daily condo rentals, 2018
This article is for general information and is not legal or tax advice. Laws, fees and project terms change: before a deal we check the current conditions for the specific property.
