Essential Expenses in Thai Real Estate Ownership
Owning real estate in Thailand, particularly in its humid tropical climate, involves a set of expenses to maintain the property's technical condition. Regular ventilation, garden and pool maintenance, insect control, and other aspects contribute to a list of necessary expenditures.
Sinking Fund: The Sinking Fund is a one-time contribution for the capital repair fund, made by the initial buyer. It typically starts from 100,000 Baht.
Reserve Account: This account is allocated for major repairs such as elevator maintenance, corridor upkeep, road maintenance, etc.
Taxes:
- Property Ownership Tax: In Phuket, this tax is relatively low and is usually calculated based on the property's assessed value. The property tax rate in Thailand can go up to 0.3% of its appraised value.
- Rental Income Tax: When renting out property, income tax is applicable, varying based on the total rental income. Non-residents face a fixed 15% rate, while residents follow a progressive scale.
Common Area Maintenance Fee: An annual fee for the maintenance of common areas includes pool cleaning, garden care, waste disposal, etc. This fee is paid in advance for the year and varies depending on location, size, and maintenance requirements. For apartments, it is typically 2,000-5,000 Baht, while villas range from 5,000 Baht per month.
Ongoing Expenses:
- Air Conditioner Maintenance: 2,000-3,000 Baht/month
- Pest Control: 1,000-2,000 Baht/month
- Wi-Fi: 1,000 Baht/month
- Bi-weekly Cleaning: Up to 5,000 Baht/week
Utilities:
- Electricity: From 4.5 Baht per kWh (depends on location)
- Water: From 25 Baht per m³ (depends on the management company)
Additional Costs for Villa Owners:
- Garden Maintenance: 1,000 Baht/week
- Pool Cleaning: 1,000 Baht/week
Rental-Related Expenses:
- Welcome Kit: 2,000 Baht
- Post-Check-out Cleaning: Up to 3,000 Baht
- Marketing Costs: (advertisement, guest attraction, ratings enhancement): From 1,000 Baht/month
- Replacement of Towels, Utensils, and Linen: 7,000-10,000 Baht/year
Additionally, property owners can opt for insurance coverage against global damages or losses due to natural disasters, fire, or theft. Insurance premiums vary based on property value and coverage level, tailored individually.
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