Real Estate & Property Transfer Fees and Taxes in Thailand
What are the fees and taxes that both buyers and sellers face in Thailand when it comes to buying or selling a property? This is one of the questions that comes up pretty much in every sales and purchase cases in Thailand. It is difficult to come up with the exact numbers if we don’t know the estimated market value by the land office, but we can at least make it clear by explaining all the taxes and fees by percentage. Hope this article will be helpful for many buyers and sellers out there.
Transfer Taxes of Real Estate (Land, House, Condominium) in Thailand:
- Stamp Duty – 0.5% (over the registered value of the property)
- Transfer Fee – 2% (over the estimated value of the property)
- Business Tax – 3.3% (over the registered sale value or estimated value of the property. Whichever is higher applies)
- Witholding Tax:
a. 1% (over the registered sale value or estimated value of the property. Whichever is higher applies) – IF THE SELLER IS A COMPANY
b. Tax is calculated at a progressive rate based on the estimated value of the property – IF THE SELLER IS A PRIVATE PERSON
Stamp Duty & Business Tax:
- Business Tax : Consist out of 3% business tax and 10% of the business tax as a municipal tax. So total of 3.3% of the sale value or the estimated value of the property. (Whichever is higher)
- Stamp Duty: It will be exempted if Specific Business Tax is applied.
- If the seller is not a company Specific Business Tax will not be paid if the seller;
a. owns the property more than 5 years before the transfer takes place.
b. transfers the property to the legal heir or an heir by a will.
c. transfers the property to a legitimate child (not adopted).
d. transfers the property without consideration to government agencies.
e. transfers the property without consideration to temples, chirches or mosques.
Who is responsible of paying taxes and fees?
If you are not buying the property from a established or licensed property developer, there is usually no standard rules on this topic. General concensus on this one is all the fees and taxes to be paid 50%-50% by both parties. And again, this can be negotiated and decided by the seller and the buyer. It would be a great idea to clarify this on the Sales and Purchase agreement to avoid unpleasant surprises along the way.
The fees and taxes should not be inclusive of the seller’s personal witholding tax. This is completely under seller’s responsibility.
Even though we usually suggest our sellers and buyers to share the tax and fees 50-50, generally the fair way to break it down is below;
Transfer Fees – The buyer’s duty (or shared)
Stamp Duty – The seller’s duty
Specific Business Tax – The seller’s duty
Witholding Tax – ALWAYS The seller’s duty
Fees & Taxes When You Purchase a Property form the Developer:
According to Consumer Protection Law, the licensed developer is fully responsible for Specific Business Tax and Income Witholding Tax. Also at least half of the 2% Transfer Fees that charged by the Land Office on the ownership registration process.
The registration process usually doesn’t take longer than a half day.
Lease Registration Fee:
Lease registration fee of a property is calculated as 1% of the total rental amount for the whole lease term. Also 0.1% of the total rental amount will be collected as a stamp duty. All will be collected at the land office department at the time of registration.