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Taxes

The undoubted advantage of Thailand in comparison with some European countries is the absence of taxes on residential property. Existing taxes on property are charged only from the owners of commercial real estate or land. These taxes are land tax, local development tax and the tax on the use of buildings.

The majority of Thai real estate agencies practice the payment of taxes by a seller and a buyer equally. However, you can always agree on more favorable terms. This item (who pays taxes) should be fixed in each sales contract.

The list of obligatory taxes for the purchase and sale of real estate:

  • Transfer Fee. It equals 2% of the appraised value of property, which is settled by the Land Office. The cost of real estate by the evaluation of the Land Office can differ from the amount specified in your contract.
  • Stamp Duty. It equals 0,5% of the highest value of the property (the contract price or appraised value by the Land Office). This tax is paid, if the property was in the possession of the last owner more than 5 years.
  • Special business tax. It equals  3,3% of the highest value on the property (the contract price or appraised value by the Land Office). This tax is paid, if the property was resold at least once in the last 5 years.
  • Withholding tax, which is also called a turnover tax. The percentage of the tax is difficult to specify, since it is calculated individually on the basis of several characteristics: appraisal cost, time period of ownership by the seller of the apartment and the individual withholding tax rate.

The exact value of the income tax you will be told to you at the Land Office. Usually this fee is on average from 2.5% to 7.5% of the property price.

The approximate calculation of tax levies on the purchase of an apartment with the price of  5 000 000 Baht, on condition that a seller owns this property less than 5 years, is:

  1. Transfer fee 2% - 100 000 THB.
  2. Specific Business Tax & Local Tax 3.3% - 165,000 baht.
  3. Income Withholding Tax of approximately - 100,000 baht.
  4. Other charges  approximately - 300 baht.

So the total amount of tax levies is 365,300 baht. We remind you that this money will be divided 50/50 between a seller and a buyer. So on average  for the reregistartion you will pay  182,656 baht. Moreover, these are almost the only expenses over the cost of purchased housing itself. There are cases when a seller demands to pay him the costs of maintaining an apartment for some time in advance. However, this does not happen all the time and is negotiated individually.

 

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