Question about investing in real estate in Thailand with Dutch tax liability?

Now that the Thai PIT story is coming to an end, I would like to say a few things about these kinds of issues, partly as suggested by my stepdaughter, who works at a Thai accountancy office and is very familiar with Thai laws and regulations, as she has been consulted regularly in recent weeks.

1- If a Thai spouse owns land, registered at the land office with valid chanotes, she can freely and happily build as the good old days go by. If it concerns construction on a project basis, for example 10 to 12 apartments to generate rent, she must submit a building plan to the officials at the land office. Neither during the construction, nor during the planning, and certainly not during the consultation with officials, the presence of a farang-spouse is desirable. For the simple reason that a farang is not allowed to own Thai land according to the Thai Land Act. That a farang finances the plans of his spouse is between him and the spouse.

2- If a farang gives money to his wife to purchase land, he is expected to sign a waiver of both money and property, thereby renouncing any say in the matter.

3- A lease contract lasts for 30 years. After such a term, a new contract can be negotiated. The owner/lessor is not obliged to do anything. Any verbal or written commitments are null and void. At the end of the lease, the land and buildings revert to the lessor/owner. No compensation needs to be paid, unless contractually agreed. An existing lease has therefore already run for several years. The remainder can never be 30 years.

4- Anything and everything may be done with the land and buildings, as long as it is in accordance with the contract and land office registration.

5- Amendments added to the Thai Land Code Act as well as the Foreign Business Act in 2006 restrict the employment of farang through Ltd. Companies. In any case, farangs are not allowed to work without work permits and B-visas, (Alien Employment Act BE 2551/2008) and are by definition not allowed to trade with Thai land.

6- If €30K rental income has to be generated in 400 years for 12 apartments, we are talking about ฿3,5 per month, or so. If a farang leases land from his legal spouse to milk houses, he is punishable. He generates income from illegal activities. Not even through a Ltd. Because the intention: to make Thai land a revenue model, remains. And that is not allowed!

7- Is there a way out? Yes, there is, but it starts with waving ฿20M. The “Hire of Immovable Property for Commerce and Industry Act BE 2542/1999” was designed for that, but in the context of Marcel’s comment, and Herman’s comment, further elaboration would lead too far.

Marcel Roose I read about it

1. In Thailand tax on rental income

If you are a foreigner who owns an apartment (condo) or house in Thailand and you rent it out, you will have to pay tax on the rental income in Thailand.
This is personal income tax, with progressive rates from 5% to 35%.
You may deduct certain costs (such as maintenance costs, often a flat rate of 30%).
You pay this tax annually to the Thai tax authorities.

2. In the Netherlands: Box 3 tax

In the Netherlands, foreign assets are included in your tax return, even if you pay tax on them abroad.
Your foreign real estate falls into Box 3: income from savings and investments.
The value of the property (usually the WOZ-like value or purchase price, converted to euros as of January 1 of that year) counts towards your assets.
You will then pay tax on your assets above the exemption (€57.000 per person in 2025) according to the box 3 system.

3. Prevention of double taxation

There is a tax treaty between the Netherlands and Thailand, but… that treaty does not concern Box 3, because that is a wealth tax and not an income tax.

What does that mean in concrete terms?
The rental income you receive: you only pay tax on that in Thailand.
However, you must declare the ownership of the property itself in Box 3. So you do pay Dutch tax on the value of the house or apartment, even if it is located in Thailand.

Summarized:
Yes, you pay tax on your rental income in Thailand.
But in the Netherlands you pay tax on the ownership of the real estate itself (Box 3).
So you do not pay double on the rental income, but you do pay on the property in the Netherlands.