Want to rent out your apartment in Thailand?
If you wish to rent out your Thai apartment, there are several important considerations to keep in mind…
Renting out an apartment in Thailand can be a great way to maximize your investment and generate passive income. However, for foreign owners, there are certain legal requirements and regulations that must be followed. This article covers the essential information that every apartment owner in Thailand should know, as well as options for how we can help make the rental management process easier for you.
1. Legal Rental Options
As an apartment owner in Thailand, you have the right to rent out your unit as long as this activity is not classified as a business. If you rent out your property occasionally, you may avoid the requirements of the Foreign Business Act and the Alien Employment Act. However, if renting becomes a regular and primary activity, you would need to comply with these laws.
2. Condominium Rules
Many apartment complexes have no restrictions on rentals, allowing both long-term and short-term leases. However, some modern complexes may have internal rules limiting short-term rentals, particularly popular on platforms like Airbnb. If your complex has no such restrictions, you have the freedom to rent out your property as you wish. If restrictions are in place, you may propose a change to the rules at the owners' general meeting, as only unit owners have the authority to make rule changes.
3. Short-Term Rental
If you rent out your apartment for less than 30 days, you may fall under the Hotel Act (B.E. 2547), which imposes certain obligations on short-term rental operators. According to this act, you may be required to:
- Register as a Hotel Facility: If you provide short-term accommodation regularly, you must register as a hotel with the Ministry of Interior. This involves adhering to stricter rules regarding safety and services.
- Reporting Obligation: If you accommodate foreign guests, you must report their arrival to the Immigration Office, which can be done either online or in person. This requirement applies to all short-term rentals to foreigners.
You can find the procedure for reporting a foreign tenant at this link.
**Exceptions**: Exemptions from the Hotel Act may be granted if you rent out your apartment only a few times a year or if the rental is irregular. However, obligations such as reporting guests to immigration authorities still apply in these cases.
4. Long-Term Rental
For long-term apartment rentals in Thailand, several key requirements must be met. For leases longer than three years, it is mandatory to register the contract with the Land Department, ensuring its legal enforceability against third parties. Without this registration, the contract may be considered invalid. The maximum lease term is 30 years, with the option for two renewals, totaling 90 years.
Regarding rental payments, as a foreign owner, you can collect rent in a foreign account, but it is essential to ensure that all rental income is properly reported to the Thai tax authorities. If you choose to transfer income to Thailand, you may open a Thai bank account, which can also assist with tax management. All rental income is subject to Thai income tax, and you may be liable for a withholding tax of 5–15%, depending on whether you have a Thai Tax Identification Number (TIN). This withholding tax can later be claimed as a credit in your annual tax return.
5. Tax Obligations
Apartment rentals are subject to several tax obligations. In addition to the annual property tax, rental income is considered personal income and must be reported via a tax return. Foreign owners must obtain a Tax Identification Number (TIN) and file an annual tax return in Thailand. If the tenant is a business entity, a withholding tax of 5–15% may be applied, depending on whether you have a Thai TIN. This withholding can later be claimed as a credit in the annual tax return.
Long-term rentals in Thailand are also taxed progressively based on income level, with a base rate of 0% for income up to 150,000 baht per year and a top rate of 35% for income exceeding 4 million baht.
6. Rental Agreement and Rental Management
To ensure the legal enforceability of your rental, it is essential to have a written rental agreement. For a hassle-free rental experience, you can take advantage of our rental management service, which includes:
- Securing suitable tenants through trusted real estate agencies,
- Property maintenance and repairs to keep your apartment in top condition
- Full management of the rental relationship, including rent tracking, invoicing, and tenant check-in and check-out,
- Ensuring compliance with Thai regulations, such as reporting guests to immigration authorities.
This service is available for an additional fee and provides you with maximum convenience and peace of mind, no matter where you are located.
Renting out an apartment in Thailand can be easy and profitable if all requirements are met.
With our assistance, we ensure everything runs smoothly and without complications.