Property taxes and fees in Thailand

The process of settlement of compulsory taxes and various fees for purchasing house or flat in any city of Thailand can differ sharply from the same procedure in the country you come from. Sometimes sellers or real estate agents don't mention the duties and other obligatory payments, and you are likely to suddenly receive a heavy sum to cover for the commonwealth which you haven't planned in your budget. It means that sellers or agents you might cooperate with are not legally obligatory to inform you concerning taxation process, but the amount to be remunerated can constitute a huge percentage over the total price of your future house or flat.

Such a situation on market of property can cause possible real estate bubbles and speculations which are highly avoided by the legal institutions of Thailand. That's why there are certain limits realized by way of taxation which depends on the period you have been the proprietor of your realty. The longer this period is the lower the tax.

Anyway, our aim is to make the taxation process much clear for you. And in this article we depict that there are four types of expected taxes which must be obligatory paid after the purchasing or selling the realty of any kind in Thailand. But the exact list of fees is set when the following requirements are completely determined: the terms of the deal, the description of the vendor, the period of the vendor`s ownership. Moreover, these duties are calculated in correspondence to the assessment value of the sold house or flat which is ascertained by the state representative bodies. And we stress out that this value calculated by official bodies is never greater than the market price in most cases.

Transfer fee

The fee for transfer is the first mandatory government revenue which must be reimbursed for sale and assignation of possession of the fixed property. This sum is transferred to the land office of the town you perform the deal in upon transfer of the ownership. This fee amounts 2% over the assessed value of the property or sale value. The assessed official value is calculated by the methods of Land and Treasury Departments and it isn't equal to the sale market price. The assessed valuation is defined by the government in order to resolve the tax sum to be paid. The sale value is previously registered in the signed contract and it is the actual price determined between both parties. The assessed value utilized by the land offices is often way below the real price. The scheme of transfer fee payment must be settled by the parties in advance.

Specific Business Tax (SBT)

Every company and individual who possesses the estate for less than 5 years obligatory pays SBT. This tax is charged if the seller presents a legal entity or is a person and the premise is sold within 5 years since the purchase was registered. (The tax is compulsory charged in both cases: when the vendor represents a legal entity and when the vendor is an individual and has possessed the sold object for five years since the moment the person bought it.) SBT is an assessment taxation process imposed on the convey of realty. The calculation of this tax is based on the registered price or the assessed valuation performed by the calculation of the government depending which amount is higher.

Meanwhile we want to enumerate the following several certain conditions which allow you as individual seller avoid payments of SBT:

1. The property sold has been possessed for 5 years and more before the deal.
2. The seller of the premise was recorded personally in the registration book of the house for 1 year and more. Moreover, the important factor to be considered is the following: the sold flat or house has been used as the main point of residence of the seller.
3. The tenement is transferred to legitimate children of the vendor. Meanwhile, this case doesn`t include adopted children.
4. The property is sold to the government and the deal is caused by the expropriation.
5. The premise is gifted to the state or exchanged with the state property.

Stamp Duty

Stamp duty rate is 0.5% over the actual fixed price of the sold property or assessed value depending on which amount is higher. It is paid in case SBT isn`t obligatory during the sale procedure and seller does not pay it.

Withholding Tax (WHT)

Withholding Tax for individual sellers. In case of individual vendors who are real people the withholding tax calculation is based on the rate estimated according to the appraisal valuation of the realty. In addition to this the whole period of holding is also taken into account. Usually the exemptions don`t concern the bargains with foreigners. Tax rate 0%-35%.

Withholding tax for Income of the legal entity. When the company sells the tenement the WHT is 1% of the appraisal value or the actual price depending on which sum is greater.

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