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Second-home and rental condo owners must pay the 2026 Land and Building Tax from the first baht at a 0.02% rate. Includes calculation examples, pitfalls to avoid, and payment deadlines.
You just closed the deal on a second condo for rental income, calculated a beautiful rental yield, and then suddenly, a letter arrives from the local municipality: "Land and Building Tax Assessment." Many people at this point start to panic, fearing they will be heavily taxed until their rental profits are wiped out.
The truth is, this tax for residential properties isn't as high as you might fear. However, the tax on a "second home" is not the same as a "first home," and there is a small trap that can cause some to pay up to 15 times more than they should. This article summarizes everything you need to know in one place.
The heart of the Land and Building Tax lies in the word "exemption." For your first home—where you own both the land and the building and your name is in the house registration (Tabien Baan)—you are exempt from tax on the first 50 million Baht of the appraised value (or the first 10 million Baht if you only own the building). This means most people with only one home pay practically nothing.
However, as soon as it becomes a second home or a condo bought for rent, this exemption disappears immediately. You must pay tax "from the very first Baht" of the appraised value, according to data from Krungthai Bank and Sansiri. The reasoning is that the government views properties beyond your primary residence as investments, thus removing the exemption given to primary homes.
Here is the part that will put your mind at ease—the tax rate for "other residential properties" is actually quite low. It is calculated on a progressive scale based on the appraised value, starting at 0.02% for values up to 50 million Baht. An easy way to remember this is "200 Baht per year for every 1 million Baht." The rate steps up progressively from 0.02% to 0.10% as the value increases (Source: DDproperty and Krungsri).
Let's look at some examples in the context of Chiang Mai condos and houses that people actually buy to rent out:
A rental condo in Chiang Mai with an appraised value of 2.5 million Baht → Tax is around 500 Baht/year.
A condo valued at 3 million Baht → Tax is around 600 Baht/year (this figure aligns with examples consistently cited by multiple sources).
A second home valued at 5 million Baht → Tax is around 1,000 Baht/year.
Compared to the rent collected over a full year, the land tax is a very small cost. But "small" doesn't mean "negligible," because it must be included in calculating your true net yield, alongside common area fees, maintenance costs, and personal income tax on rental income.
Note: The figures above are calculated based on the "appraised property value" by the Treasury Department, not the market price you paid, which is usually higher. Therefore, the actual tax paid is often lower than if calculated from the purchase price.
The most common mistake novice investors make regards the "property usage classification." The law looks at the actual usage of the room or house, not just your initial intention when buying it.
If you rent it out for the tenant to "reside" in normally, it is still considered the residential rate (starting at 0.02%). As noted by Krungsri, land or buildings used by the owner, relatives, or rented out for residential purposes are taxed at the residential rate.
However, if the room is used for commercial purposes—such as an office, shop, hostel, or a registered company address—the rate jumps to a starting point of 0.3%, which is about 15 times more expensive than the residential rate. This is something to be particularly careful about if you do daily rentals or semi-hotel short-term rentals, as they can easily be interpreted as commercial use.
For the 2026 tax year, the payment deadline has been extended. Originally due in April, it has been pushed to within June 2026, and allows for payments in 3 installments (June / July / August), as reported by ThaiPBS.
When you receive the assessment letter from the local sub-district administrative organization (SAO) or municipality where your property is located, you should check two things:
Is the usage classification correct?
Is the appraised value reasonable?
If you find an error, you can file an objection to the assessment following the official process. Do not rush to pay if the numbers look wrong.
The Land and Building Tax for second homes and rental condos is nothing to fear. The residential rate starts at 0.02% (or 200 Baht/year per million), and is paid from the first Baht since there is no exemption like a primary residence. What you really need to watch out for is being classified as "commercial," which spikes the rate to 0.3%. Don't forget to include this tax when calculating your total investment returns. Knowing the true costs from every angle is what separates investors who "actually make a profit" from those who just "think they do."
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Disclaimer: This article provides information for decision-making purposes and does not constitute specific tax or legal advice. If you hold multiple plots or high-value properties, we recommend consulting a tax planner or your local municipality for accuracy.
