Buying property in Phuket from Australia
Australians are the audience I have the least trouble explaining Phuket to — the flight is short, the seasons are complementary, and the yields look sane next to Sydney. What takes the conversation longer is the ATO side, because Australia taxes you on the rent and on the gain, and the offset for Thai tax paid is narrower than most buyers assume. Here is the position as it stands.
What you can own
A condominium unit, freehold, in your own name, within the building's 49% foreign quota. Not land, and not land through a company you control — what a foreigner may actually own in Thailand sets out why, and why the nominee structures still being marketed are a bad trade in 2026 in particular.
The rent goes on your return, at label R
Australia taxes residents on worldwide income, so Thai rent is assessable here. It is declared in the supplementary section of the individual return, at question 20 'Foreign source income and foreign assets or property', as other net foreign source income. Net, so ordinary rental deductions come off first, and everything is converted to Australian dollars — at the rate prevailing at the time of the transaction, or an average rate.
One thing in your favour, which surprises people who remember the old rules: foreign losses are no longer quarantined. That was repealed with effect from 2008–09. So if the Phuket apartment runs at a net loss in a given year — a vacant quarter, a special levy, a furniture replacement — that loss reduces your Australian taxable income rather than sitting in a separate box waiting for foreign income to appear.
The foreign income tax offset, and where it runs out
Thailand taxes the rent first. You then claim a foreign income tax offset for the Thai tax actually paid, on income you have also included in your assessable income here. If the offset you are claiming is $1,000 or less, you simply record the Thai tax paid and stop. Above that you have to work out the offset limit, and this is where the arithmetic bites.
The limit is the difference between your tax payable as returned and your tax payable recalculated with the double-taxed foreign income and its related deductions taken out. Whatever Thai tax exceeds that limit is not creditable — and it cannot be carried forward to a later year. In the limit calculation itself, debt deductions such as interest and borrowing costs are excluded unless they relate to a permanent establishment overseas, which a let apartment is not.
Selling: the discount cuts both ways
A Phuket condominium is a CGT asset like any other for an Australian resident, and Australia treats gains on overseas assets the same way as gains on Australian property. If you have held it for at least twelve months, the 50% discount applies to the remaining gain. The cost base picks up the incidental costs — the Thai transfer fee, stamp duty or specific business tax, legal and agency fees, valuations and searches — so keep every receipt from the Land Office, in baht, with the date.
Article 13 of the 1989 Australia–Thailand agreement lets Thailand tax the gain on immovable property situated there, and Article 6 does the same for the rent. You claim the offset for the Thai tax paid — subject to the limit above, which is precisely why halving the Australian gain can leave Thai tax stranded. Worth running past your accountant before you choose the year in which you sell.
I am in Australia and would like the numbers on a specific unit, including what I would actually keep after tax.
Message me on WhatsApp →If you stop being an Australian resident
This is the item most likely to be missed, because it has nothing to do with selling. When you cease to be an Australian tax resident you are taken to have disposed of your CGT assets at market value, except taxable Australian property — a deemed disposal of the Phuket apartment, in a year when no money has moved. You may instead choose to disregard the gains and losses, in which case the asset is treated as taxable Australian property until you sell it or become resident again. There is no form: the way you prepare the return is the election. If retiring to Thailand is part of the plan, decide this deliberately rather than discovering it afterwards.
What you actually have to disclose
There is no Australian equivalent of an American FBAR, and no schedule of foreign assets. What exists is a yes/no box at the same question 20: did you at any time during the year own or have an interest in assets outside Australia with a total value of A$50,000 or more. You tick it. No values, no addresses. That is the whole disclosure — which is not a reason to be casual about it, because ticking it wrongly is a false statement on a return.
What Thailand takes, whatever your passport
This half does not change by nationality, and it is worth having straight before you look at the tax position at home.
- On purchase. A transfer fee of 2% of the appraised value at the Land Office. The reduced 0.01% fee that appears in Thai news coverage — extended, as reported, to 30 June 2027 — is limited to Thai nationals. A foreign buyer pays the full 2%.
- On the rent. Rent from Thai property is taxable in Thailand wherever it is paid. Where a tenant or agent pays a non-resident owner, 15% is withheld at source under section 50(3) of the Revenue Code. That is not a final tax: under section 60 it is credited against the liability calculated on the Thai return, and for most owners a large part of it comes back.
- The Thai calculation itself. The progressive scale runs from nil below THB 150,000 to 35% above THB 5,000,000, and rent from a building carries a standard expense deduction of 30% under Royal Decree No. 11, or actual documented expenses instead. The annual return is due by the end of March, with a half-year return for rental income by the end of September.
- While you hold it. Land and Building Tax, assessed by the municipality on the position at 1 January. On a residential unit that is not your registered home the rate sits in hundredths of a percent of appraised value; property assessed as hotel or commercial use is charged materially higher.
- On sale. 2% transfer fee again, plus specific business tax of 3.3% if you sell within five years of acquiring — or stamp duty of 0.5% if you do not, never both — plus the seller's withholding income tax, computed at the Land Office on the appraised value after a deduction that scales with the years you held it.
- On death. Thailand has an inheritance tax, but the threshold is high: THB 100 million per heir, with tax only on the excess, at 5% for ascendants and descendants and 10% for others. A spouse is exempt. The return is due within 150 days.
The sequence I would follow
Check the quota on the specific unit. Establish whether nightly letting is lawful in that building before you let anyone show you a projection — how to calculate a net yield here explains what a real net number looks like once management, sinking fund and vacancy are in it. Send the money as foreign currency for conversion in Thailand and keep the bank's evidence, which is what your freehold is registered against. Then tell your accountant in the year of purchase, and keep the Thai tax receipts in a form they can actually use for the offset.
In short
Nothing about an Australian buying in Phuket is difficult. The tax is a bookkeeping discipline rather than an obstacle: declare the net rent at label R, claim the offset for the Thai tax, remember that a foreign loss now helps you, and treat the cessation-of-residency rule as a decision rather than a surprise. I am not a tax agent and none of this is tax advice — take the figures to yours for the year you transact.
- Investment property selection — net yield calculated on specific units
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Legal, visa and tax work is not mine — it belongs to partners I use constantly
I am an investment strategist: I select the property, calculate the net return, check the developer and run the transaction. Anything that needs a legal, immigration or tax qualification goes to specialists I have worked with for years.
- Thai lawyers — document and contract review, land title, registration at the Land Office, wills, powers of attorney, corporate questions
- Visa partners — choosing and filing the right route for your situation: investment-based, LTR, Thailand Privilege, retirement, DTV
- Tax specialists — reporting in your country of tax residence, treaty credit for Thai tax, declarations on foreign assets
- Company formation in Thailand — when a structure is genuinely needed and lawful
- Rental management and concierge — letting the property, transfers, yachts, events
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Frequently asked
Do I have to declare Phuket rental income to the ATO?
Can I claim the Thai tax I paid against my Australian tax?
Can a loss on an overseas rental property reduce my Australian income?
Do I get the 50% CGT discount on a Phuket apartment?
What happens to CGT if I move out of Australia while I still own it?
Do I have to report owning foreign property to the ATO?
Lyubov Fortunova
Investment strategist and founder of Fortunova Capital Group. I have lived on Phuket for more than five years and run every deal myself: I select the property, calculate the net return, check the developer and hold the process together until the keys are handed over. Lawyers, visa and tax specialists come from my own circle.
“I count net, not dreams”
I am in Australia and would like the numbers on a specific unit, including what I would actually keep after tax
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