property tax Archives

Taxes and Fees Related to the Sale of Immovable Property

February 18, 2021 3:12 am Comments Off

When buying property in Thailand, in addition to paying the price of the property, one can also expect to pay other fees, duties, and taxes in order for the transfer of ownership to be complete. In our experience, for people who are unaware of these extra costs, it can mean the difference between deciding whether or not to purchase a property. Before purchasing property, it is wise to consult a property lawyer and do the required due diligence to ensure that that title deed is correct, the owner’s name is present on the title deed, and the property’s size as described is correct.

In Thailand, taxes and fees related to property should be calculated before the decision to purchase, because the buyer should know what the entire transaction is going to cost, and who is responsible for each payment. There is no law on who has to pay for which fees, but there are basic norms in Thailand on who would normally pay for each fee related to the sale. However, the parties may make their own agreement on who pays what fees. The taxes, fees, and duties related to the sale of property in Thailand are as follows:

Transfer Fee

The transfer fee of a property is a government fee on the sale and transfer of ownership of real property which is collected by the local land office (where the property is located) upon the transfer of ownership of such property. The transfer fee of a property is 2 % of the appraised value of the property and is usually split between the buyer and the seller or paid by the buyer.

Specific Business Tax (SBT)

The Specific business tax in Thailand is 3.3% of either the sale price of the property or the appraised price of the property (whichever is higher). Note that this tax consists of 3% Specific Business Tax + a Local Tax of 10% assessed on the amount of the specific business tax (total tax 3.3%) The business tax is usually paid by the seller. The specific business tax does not need to be paid if the seller is a person and not a company under the following conditions:

The property is being transferred (gifted) to a church, temple or mosque;
The property is transferred (gifted) to a government agency;
The property is transferred to a legitimate child (not an adopted child);
The property is transferred to a legal heir or heir in a will in an estate;
The seller has had the property for more than 5 years or it was the seller’s principal place of residence and the sellers name is in the house papers for at least 1 year before the sale.

Stamp Duty

Stamp duty is a government fee of 0.5 % of the registered sale price of the property. The stamp duty is usually paid by the seller of the property. Note that stamp duty is exempt if a Specific Business Tax is charged.

Withholding Tax

This tax varies whether the seller is a private person or a company. If the seller is a private person withholding tax is calculated at a progressive rate based on the appraised value of the property. If the seller is a company, the withholding tax is fixed at 1% of the registered sale price or appraised value of the property (whichever is higher).

Conclusion

In conclusion, when purchasing a property in Thailand, it is wise to consult a property lawyer prior to purchasing a property. This is because there are certain extra costs (fees and taxes) that the buyer must be prepared to incur in order for the transfer of ownership of the property to be complete. One should also calculate the total cost of the transaction as well as do the necessary due diligence before making any agreements with regards to purchasing a property in Thailand.

If there are any questions, feel free to contact us at [email protected]

Fabian Doppler
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Fabian, a founding partner of FRANK Legal & Tax, is a German-trained lawyer with expertise in corporate/commercial and real estate law, and litigation, and has been living and working in Thailand since 2005.

New Land and Building Tax Act

November 18, 2016 12:00 am Comments Off

On 7th of June 2016, the new Land and Building Tax Act (the “Act”) was formally enacted. The Act will likely become effective in early 2019 and will be replace the existing and old Land and House Tax Act B.E. 2475 (1932) and the Local Development Tax B.E. 2508 (1965).
The new law will introduce an entirely new system of property taxation. While the previous system focused on gains derived from property, going forward an annual tax payment for the property as such will be implemented. This will likely increase the tax burden for owners of larger land areas and for land banking.
Under the Act, tax payer is the
1) Owner of land and structures;
2) Owner of condominium; and
3) Possessor or beneficiary of land or structures on government property.
The maximum tax rates vary, depending on the type of occupancy of land and structures:

Above rate represents the maximum rates under the Act, the actual tax rate will be set forth by royal decree.
Please see more detailed stipulations of the tax rates as follows:

1. Lands and structures for agriculture and the first residence