Published on and written by Cyril Jarnias
Buying or owning real estate in a foreign country while remaining taxable in France immediately raises a delicate question: how to avoid paying tax twice on the same income or the same capital gain? For French nationals interested in real estate in Thailand, the answer rests on three pillars that must be clearly articulated: local Thai taxation (purchase taxes, annual taxes, rental and resale taxes), the absence of a standalone capital gains tax in Thailand, and the Franco-Thai tax treaty that prevents double taxation.
This article offers a practical yet rigorous reading of this trio, focusing on the typical case of a French national investing in a condominium in Phuket, Bangkok, or Chiang Mai, or moving to Thailand while maintaining real estate assets in France.
Understanding the General Framework: Two Tax Systems and One Treaty
Before discussing percentages or forms, it is essential to understand the overall architecture. Thailand levies personal income tax (PIT) and an annual land and building tax (Land and Building Tax), but does not have a standalone capital gains tax regime for individuals on real estate. Meanwhile, France taxes its residents on their worldwide income, including rents and capital gains from properties located abroad.
To avoid double taxation, France and Thailand have signed a treaty that allocates the right to tax according to the type of income (e.g., rental income, capital gains, pensions). The country that obtains an exclusive right requires the other to exempt or grant a tax credit.
The Franco-Thai Tax Treaty, the Backbone of the System
The tax treaty between France and the Kingdom of Thailand aims “to avoid double taxation and prevent tax evasion with respect to taxes on income.” It covers, in particular, income taxes and capital gains taxes, both on the French side (income tax, corporate tax) and the Thai side (income tax, petroleum income tax).
The treaty applies to any resident of a contracting state. In case of dispute (e.g., time split between two countries), hierarchical criteria are provided: permanent home, center of vital interests, habitual abode, nationality, then agreement between administrations.
In the real estate area, three articles are crucial: Article 6 on income from immovable property (rents), Article 13 on capital gains (gains on resale), and Article 23 on methods for elimination of double taxation.
Local Taxes and Purchase Taxes in Thailand: What a French National Actually Pays
For a French investor, the first layer of taxation occurs at the Thai level, from the acquisition of the property and then annually during ownership. Contrary to some misconceptions, Thailand does not overtax foreigners: rates are the same for Thais and non-Thais, although in practice certain reliefs (especially on primary residences) are easier for nationals to obtain.
Fees and Taxes Upon Property Acquisition
When purchasing a condominium or house, the process at the Land Department triggers several taxes and fees calculated not on the market price but on the “official value” of the property, i.e., the government’s assessment (generally lower than the sale price).
The main levies at registration are as follows:
| Type of tax or fee | Base rate | Basis | Usual payer |
|---|---|---|---|
| Transfer fee | 2% | Official value (Land Department) | Often split 50/50 buyer/seller |
| Specific Business Tax (SBT) | 3.3% (3% + 10% municipal surtax) | Higher of official value and sale price | Seller |
| Stamp duty | 0.5% | Higher of official value and sale price | Seller (only if SBT not due) |
| Withholding tax (seller) | 1% (company) or progressive scale (individual) | Official value or price (whichever higher) | Seller |
The 2% transfer fee is a constant. Legally it is the responsibility of the parties as agreed, and in practice it is often shared: 1% for the seller, 1% for the buyer. Economic stimulus measures have temporarily reduced this rate to 0.01% or 1% for certain low-value residential purchases, but these benefits target Thai buyers and exclude foreigners.
The Specific Business Tax (SBT) of 3.3% mainly applies to quick resales (property held less than five years) or legal entities. When SBT is due, the 0.5% stamp duty does not apply. Conversely, for long-term ownership (more than five years) without SBT, the stamp duty applies.
The withholding tax at the time of sale constitutes a form of prepayment of the seller’s income tax:
– For a company, the rate is 1% of the reference value;
– For an individual, the administration applies a complex formula that approximates the gain to a series of annual incomes, subject to the progressive scale of 5 to 35%.
In practice, for an individual, this withholding often represents between 1% and 4% of the official value. For a non-resident, this levy is generally considered final.
For a French national purchasing a condominium worth approximately 10 million baht, the sum of these taxes and transfer fees at registration typically falls between 200,000 and 650,000 baht, depending on whether the seller is a company or an individual, and on the prior holding period.
The Annual Property Tax: Land and Building Tax
Since the Land and Building Tax Act came into effect, Thailand levies an annual property tax based on the official value of land and buildings. This levy, collected by local authorities, replaces an older system that was much heavier and theoretical.
The rates applied to condominiums held by foreigners remain very low by European standards.
| Type of residential use | Official value bracket | Indicative annual rate in 2026 |
|---|---|---|
| Primary residence (land + house, 1 property) | 0 – 50 M THB | Exemption (0%) |
| Primary residence (building only, e.g., condo) | 0 – 10 M THB | Exemption (0%) |
| Second home / rental property (foreigner condo) | 0 – 50 M THB | 0.02% |
| Second home / rental property (high value) | 50 – 75 M THB | 0.03% |
| Second home / rental property (very high value) | 75 – 100 M THB | 0.05% |
| Luxury segment | > 100 M THB | Up to 0.10%, legal cap 0.30% |
In most cases, a tourist or investment condominium owned by a French national is classified as “other residential,” i.e., a second home or rental property, without a basic exemption. Nevertheless, the charge remains negligible: a property valued at 10 million baht incurs about 2,000 baht per year (i.e., 0.02%), a property worth 20 million baht about 4,000 baht.
There is no specific surtax for foreigners: for equivalent value and use, the rate is the same for a Thai and for a French national. In practice, nationals more easily benefit from the primary residence exemption (up to 50 million baht in official value) thanks to their registration on the house register (Tabien Baan). An unregistered foreigner is immediately treated as “second home.”
Rental Income: Who Taxes What, and How to Avoid Double Taxation
Once the property is acquired, the second layer of taxation concerns rents. Here, the Franco-Thai treaty plays a decisive role, because the same income could theoretically fall into the tax base of two countries: Thailand as the state where the property is located, and France as the state of residence of the taxpayer.
Basic Rule of the Treaty: Article 6 on Income from Immovable Property
Article 6 of the treaty is clear: income derived from immovable property (house, apartment, commercial building, agricultural or forest land) is taxable in the state where that property is situated. This right to tax is de facto exclusive for such income.
Concretely, if a French national residing in Thailand owns a rental apartment in Paris, France alone has the right to tax that rent. Conversely, a French national owning a rented condominium in Phuket will see the rents taxed in Thailand. This is a key point: the treaty assigns tax jurisdiction to the country where the property is located, regardless of the place of residence.
How Thailand Taxes Rents from a Local Property
For a French national who rents out their property in Thailand, the rents are considered Thai-source income. They are therefore, in principle, taxable in Thailand, even if the owner does not reside in the country.
The standard scheme is as follows:
If the owner is a non-resident (less than 180 days in Thailand during the year), the tenant or management company withholds tax at source of 15% on gross rent. However, for a Thai tax resident, the income is subject to the progressive personal income tax (PIT) scale, after a standard 30% deduction for expenses.
In both cases, the tax base is not the property value, but the net income from the rental. The automatic 30% deduction simplifies the accounting for expenses (maintenance, management, minor repairs). The Thai progressive scale starts at 0% for the first 150,000 baht of net income, then rises by brackets up to 35% above 5 million baht. In practice, the effective rate on typical rental income often remains below 10–15% of gross rent, especially for individual investors.
The 15% withholding tax for non-residents is not necessarily final. An owner can file an annual tax return (form PND 90 or 91) to claim the 30% deduction and recalculate the tax due according to the progressive scale. If the actual tax is lower than the 15% already withheld, the difference can be refunded upon request.
What France Taxes on These Thai Rents
For a French national who remains a tax resident of France, France requires the declaration of all worldwide income, including rents received from a property located in Thailand. The investor must therefore:
Steps to declare rents received in Thailand and benefit from the tax credit
Convert the gross rents from Thai baht into euros using the Banque de France annual average exchange rate.
Declare the converted amount on Form 2047 “Income received abroad.”
Report the income on the 2042 return after deducting expenses (management, insurance, repairs).
Indicate the tax already withheld in Thailand (15% withholding) to benefit from a tax credit.
Legally, the treaty recognizes Thailand’s primary right to tax these rents, but France retains the ability to include them in the calculation of French tax, neutralizing double taxation through a tax credit limited to the foreign tax already paid. The practical result is that the taxpayer does not pay “twice,” but rather the higher rate of the two states: if France calculates a tax higher than that paid in Thailand, it can claim the difference, after deducting the tax credit.
Threshold for triggering the French Real Estate Wealth Tax (IFI) for Thai rents integrated into worldwide real estate assets in France
Special Case: French National Who Is a Thai Tax Resident
If a French national breaks their tax residency with France and becomes a Thai tax resident, they shift more fully into the Thai system. They must then declare their worldwide income, but only to the extent that it is:
– either Thai-source; or
– foreign-source and actually remitted into Thailand.
The new Thai rules on taxation of foreign income remitted into the country provide that foreign income (e.g., rents from an apartment in Paris) becomes taxable in Thailand if it is transferred into the country at a time when the taxpayer is a Thai tax resident. However, the treaty neutralizes this taxation when it involves real estate income situated in France: France retains exclusive rights over these rents, and Thailand must, in principle, grant an exemption under Article 23. In practice, these incomes are reported on the Thai tax return “for transparency,” but without generating tax thanks to the treaty exemption mechanism.
Capital Gains on Real Estate: A Thai Advantage, French Taxation
For French nationals, perhaps the most attractive aspect of Thai real estate taxation is the absence of a tax specifically designated as “capital gains tax on real estate” for individuals. This particularity, combined with the treaty rules, determines who will tax what type of gain and at what level.
The Rule of Article 13: The Gain Follows the Property
Article 13 of the Franco-Thai treaty governs the treatment of gains from the “alienation” of immovable property. The principle is analogous to that for rents: the capital gain is taxable in the state where the property is located, and this right is exclusive. In other words:
– The sale of property located in France is taxable exclusively in France, even if the seller resides in Thailand;
– The sale of property located in Thailand is taxable exclusively in Thailand, even if the seller is a tax resident of France.
Thailand taxes capital gains on real estate, but without a specific tax regime for individuals. The gain is treated via income tax with a withholding tax collected by the Land Department.
How Thailand Actually Manages Capital Gains for Individuals
When an individual sells an apartment or house, Thailand does not apply a flat rate on the realized gain, like the French 19%. Instead, it uses the withholding tax mentioned earlier, calculated on the official value using a mechanism that reconstructs an “average annual income” over the holding period. This base is then subject to the progressive scale.
In practice, this mechanism results in a total levy (withholding tax) in the range of about 1% to 4% of the official value for most standard resales. For a non-resident, this levy is most often considered a final tax and does not require subsequent adjustment. This functioning explains the frequently repeated statement that “Thailand has no individual capital gains tax”: the country does not levy a standalone tax calculated on a net gain, but a withholding, treated as income tax, whose yield is relatively low for individual sellers.
Real estate taxation in Thailand
France, on the Other Hand, Heavily Taxes Real Estate Capital Gains
On the French side, the regime for real estate capital gains for residents is well established and strictly applied, including for properties located abroad. A tax resident of France who sells an apartment in Phuket is taxed:
– at a flat income tax rate of 19% on the taxable gain;
– at social surcharges totaling 17.2% on the same base, i.e., an overall rate of approximately 36.2%;
– at an additional progressive surtax for gains exceeding €50,000 (between 2% and 6% depending on the amount).
These rates are mitigated by a holding period allowance system:
| Holding period of a property in Thailand by a French resident | Effect on French real estate capital gains tax |
|---|---|
| Less than 6 years | Full taxation at 19% + 17.2% + possible surtax |
| Between 6 and 22 years | Progressive annual allowances on the taxable base for income tax and social surcharges |
| After 22 years | Full exemption from the income tax portion (19%) |
| After 30 years | Full exemption from the social surcharges portion (17.2%) |
The Franco-Thai treaty does not protect the French resident from taxation in France on the capital gain from a Thai property, since it is precisely France that holds the exclusive right to tax real estate gains of its residents on properties located abroad, in the absence of effective tax in Thailand. In practice, almost the entire tax burden on the capital gain of a Thai property for a French resident therefore falls in France, with the Thai contribution remaining marginal via the land withholding tax.
France taxes real estate capital gains of non-residents at 19% tax plus 17.2% social surcharges, for a total of 36.2%.
Effect of the Treaty on Cross-Border Capital Gains
The treaty thus acts as a safeguard: a French resident in Thailand who sells an apartment in Lyon will bear the full French tax on the capital gain without running the risk of being taxed again in Thailand on that same gain, even if the sale proceeds are repatriated. Thailand must, by virtue of Article 23 and the exemption mechanism, refrain from taxing gains from the sale of property located in France, because the treaty allocates an exclusive right to France.
Conversely, a French resident who sells a condominium in Bangkok will not be taxed in Thailand on the capital gain as such, because the country does not have a standalone CGT for individuals, but will face the full French capital gains tax, with the Thai withholding tax remaining, in this context, a relatively modest charge.
Foreign Income Remitted to Thailand: Interaction Between New Domestic Law and the Treaty
A recent development complicates the picture a bit more: the evolution of Thai taxation on foreign-source income.
Any Thai tax resident is taxed on their foreign income (rents, capital gains, salaries, dividends) only upon remittance into Thailand, even if that income was generated in a prior year, in accordance with the latest administrative clarifications.
This principle, seemingly broad, must be reconciled with the tax treaty. When income is allocated exclusively to the other state, Thailand must grant an exemption. This is the case for:
– rents from a Paris apartment owned by a resident of Thailand (Article 6);
– capital gains on the sale of real estate located in France (Article 13);
– certain French pensions (Articles 18 and 19).
Income declared in Thailand is exempted via Article 23 §2 a) of the Franco-Thai tax treaty. Only income subject to shared taxation (dividends, interest, royalties) is taxable in Thailand, with a tax credit for amounts already withheld in France.
For a French national who moves to Thailand with significant real estate assets in France, this coordination is essential: it guarantees that French real estate income will not be taxed twice, even if it is repatriated to finance daily life in Thailand.
Practical Summary: Typical Profile of a French Investor in Thai Real Estate
To measure the concrete impact of this mosaic of rules, it is useful to consider a typical profile: a French taxpayer, tax resident of France, who buys a condominium in Phuket for 10 million baht, which they then rent to tourists.
During the holding period:
The annual Land and Building Tax in Thailand corresponds to about 0.02% of the official value of the property, i.e., about 2,000 baht per year for a property worth 10 million baht.
– In France, they must:
– declare the rents in euros on Form 2047 and then on Form 2042;
– impute the Thai tax (15% withholding) as a tax credit;
– pay the 17.2% social surcharges on net rental income;
– include the value of the condominium in their potential IFI base if their worldwide real estate assets exceed €1.3 million.
On resale:
– In Thailand, they pay:
– again transfer taxes: 2% transfer fee (potentially shared with the buyer), 3.3% SBT if the resale occurs within five years, otherwise 0.5% stamp duty, and a withholding tax calculated on the official value, rarely exceeding a few percent of that value.
In France, the sale of real estate located abroad by a French resident is subject to real estate capital gains tax: 19% income tax and 17.2% social surcharges. An additional surtax may apply for gains exceeding €50,000. Allowances for holding period apply: full exemption from income tax after 22 years and from social surcharges after 30 years.
The tax treaty ensures that taxes paid in Thailand on rents do not indefinitely increase the French bill, and that Thailand will not attempt to tax the capital gain on a French property or the rents from an apartment in Paris. Conversely, France cannot claim tax on rents from a Thai property without taking into account the local tax already levied.
Conclusion: A Generally Favorable Framework, Provided You Master It
For a French national, real estate in Thailand combines a relatively light local tax system – minimal property tax, no real capital gains tax for individuals, a reasonable rental income tax scale – with a solid tax treaty that governs the allocation of taxing rights between the two countries.
This combination does not exempt from French tax when the taxpayer remains a French resident: capital gains on a Thai property, rents from Phuket, and possibly the IFI value are fully included in the French tax base, at the well-known rates. But it avoids the nightmare of gross double taxation: local tax plus French tax on the entire income, without a tax credit.
For French nationals who become Thai tax residents, the treaty plays a different role: it protects real estate income and capital gains from France against repeated taxation in Thailand, while subjecting Thai income to the local regime.
Ultimately, real estate taxation in Thailand for French nationals is neither a tax-free paradise nor a trap. It is a coherent system, relatively attractive on the Thai side, but which must be read jointly with French law and the treaty. Mastering these three levels – Thai law, French law, and the treaty – is the condition for optimizing a real estate asset strategy between France and Thailand, without nasty surprises or double tax penalties.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
