Property transfer taxes in Thailand for foreigners is an important step. 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.
Property Transfer Taxes
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. Note that condominium transfer fee needs to be calculated before you sign the sale agreement.
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.
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.
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.
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 and also 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.
Property transfer taxes in Thailand for foreigners as explained who pays which taxes of the property transfer taxes. Speak to our property lawyer about your condominium transfer fee for more information.
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You can read further on land ownership in Thailand if you are considering this. Those who are interested in property investment Thailand will need to consider many other issues when it comes to buying a condo in Thailand. Investment property can become very complex and risky. Make sure that you understand the title deeds in Thailand as there is only the Chanote which expats should be interested in.
Also ensure that you understand the conveyancing fees as it is known in the west as well as the condominium transfer fees and if the buyer or seller pays which fees. Always ensure that you have done your due diligence on the property with a land title search Thailand.
The information contained in our website is for general information purposes only and does not constitute legal advice. For further information, please contact us.
Property Transfer Taxes FAQ
How much is property tax in Thailand?
Currently under the new tax system in Thailand there will be 3 maximum rates of property taxes. For commercial property it will be 0.5% of the appraised value. Private residence is 0.1% of praised value and agricultural land at 0.05% of appraised value. Check with a lawyer for any updates.
How do I sell my property in Thailand?
If you are going to sell your property in Thailand then most people tend to place a for sale notice on the board in the lobby of the development they live in. Others will use an estate agent to sell their property. Those are the two most common methods.
How do you calculate the transfer tax?
The transfer fee in Thailand is 2% of the appraised value and the business tax in Thailand is 3.3% of the appraised value. There is also 0.5% stamp duty if specific business tax is charged. Then the withholding tax is 1% of the sale price.