Property Transfer Taxes

When you are buying property in Thailand it is always best to speak to a property lawyer in Thailand before you sign any documents. It is also advisable to ensure that you do a due diligence report on the property you are buying done to ensure that that title deed is correct and that the owner and property sizes as described are correct. Property fraud and unscrupulous estate agents are not uncommon in the Thai property market as the market is not well regulated.

 

The property transfer taxes in Thailand needs to be calculated beforehand so you know what the transaction is going to cost you and also who pays for each part of the transaction. There are no fixed rules when it comes to who pays for which fees but there is a basic understanding in Thailand and to who would normally pay for each part of the transaction. Speak to our property lawyer before you make any verbal agreements with a developer or seller of the property.

Transfer Fee:

The property transfer fee in Thailand is 2% of the appraised value of the property. Note that the Land Office has a listing of all property values in Thailand. The appraised value is what the government views the value of the property to be. This is updated every 4 years by the Land Office and the transfer attorney would know what the appraised value of the property is. In the West this would be called the ‘municipal value’ of the property. The transfer fee is normally paid by the buyer of the property or it is shared by both the buyer and the seller if they agree to this.

Business Tax:

The business tax in Thailand is 3.3% of the appraised value of the property or the sale price of the property whichever is the highest. Normally the sale price is higher so this would what the business tax would be based on. The business tax is based on 3% specific business tax and a municipal tax of 10% of the specific business tax which is 0.3%. The business tax of 3.3% is normally paid for by the seller of the property. A special note on business taxes. 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 and it was the seller’s principle place of residence and the sellers name is in the house papers for at least 1 year before the sale.

The #5 in the above conditions is very important as the Thai government introduced this to dampen property speculation in Thailand or what is called ‘property flipping’ in the West. The seller normally pays this tax in Thailand.

Stamp Duty

The transfer is exempt from 0.5% stamp duty if specific business tax is being paid. The stamp duty is normally paid for by the seller and this is based on the sale value of the property.

Withholding Tax:

The withholding tax is always paid for by the seller. The withholding tax is 1% of the sale price or the municipal value whichever is higher if it is a company selling the property. If it is a person selling the property then there is a progressive scale for the tax which the lawyer will calculate for you when a due diligence gets done on the property.

This is a very basic overview of the property transfer fees in Thailand or what is called conveyancing fees in the West. If you need more information about property in Thailand then email us or call us toll-free for more information. You can also walk into our offices in Bangkok or Phuket for more information about your property purchase in Thailand.

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