Phuket Land LogoPhuket CoastlineLily

You wrote last month (May issue of the Gazette) about the costs, fees and taxes incurred when buying and later selling a property, can you tell me a little more about the costs and taxes involved in maintaining a property in Phuket?

It is perhaps useful to break the cost of maintaining a property down into three categories. Taxes, Utilities and Services and lastly Maintenance.

Most from abroad will be pleased to hear that for a residential property that is lived in by the owner, that there are no annual property taxes (or Rates to those from England). By the same token of course there are not many free public services either. The one instance when tax does becomes due on a property is if it is used for some business purpose - this includes letting the property. As well as the fairly obvious liability to income tax on (declared) rental income, there is a local tax (collected by and credited to the Ampher or Tessabaan) known as Structures Usage Tax. This highly negotiable tax is assessed at 12.5% of the notional annual rent. In practice the notional rent can be negotiated to about 15% of market value.

Lets now move on to the Utilities and Services. Public metered electricity is now available nearly everywhere on the island. The rate per kWh is a sliding one that starts just under 2 Baht perk kWh for the first few units (a policy to allow the very poor basic lighting at reasonable cost) and rises through several marginal bands to almost 3 Baht per kWh as consumption increases. In practice for all but the smallest homes you will pay an average of about 2.7 Baht per kWh. Individual monthly cost will of course vary widely with size and usage patterns. A small apartment making sparing use of Air-conditioning might only use 500 Baht per month, while a large fully air-conditioned home will likely use in the 6,000 Baht per months range

Metered water on the other hand is only to be found in a few of the island more urbanized locations. Like electric prices the cost is on a sliding scale with big users paying more. Different local authorities (and management of some housing estates who manage their own water) have differing rates, but 10 Baht per cubic meter is a typical average cost. Again personal usage will very enormously, but a typical monthly consumption for a modest house without a large garden could be in the order of 300 Baht per month . Many houses still draw water from wells, or catchments in streams - here of course the only cost will be the upkeep and operation of the pumping and storage system.

Mains sewage is even less widely available than mains water, but where it is there is no charge for using it. Most homes however will have to set up and maintain a septic tank system. Some of the newer anaerobic chambers (unlike older systems that required regular pumping) are now almost maintenance free.

Garbage collection (by a government agency) is now available in a few areas including Patong, where the charge is 50 Baht per month per house.

Many houses in Phuket will keep a full time live in maid. Salaries paid tend to vary quite widely depending on the generosity of the employer, and the skills and length of service of the maid and range between about 2,000 (below the official minimum salary) and about 6,000 Baht per month. A Gardner would get a similar salary, although gardening may often be handled better and cheaper by using one of the many garden service companies that are springing up all round the island.

The last and most difficult to quantify item is building maintenance. Tropical climates and (if in a water front location) salt sea air is tough on buildings. How well your house stands up to these element depends a lot on the design type and construction quality. Large areas of external timber work, one of the features often sought for aesthetic reasons is, sadly, always a potential trouble spot, particularly if lower grades of timber have been used. Where possible Teak or Lumpor (less expensive but also very water resistant) should be used for all exterior woodwork. Painted exteriors tend to fade or get dirty fast as well. High quality chemical paints (which cost more initially) can however be cleaned down with water and will in the end last much longer and cost less.

The good news on maintenance however is that local labour costs and even basic building material costs are relatively low. Mind you finding a handyman to clear a blocked drain when you need one in an emergency can often be just as hard as anywhere else in the world.