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You will see taxation is very modest in Thailand
and if your property is of modest value
Taxes are very modest indeed.
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Taxes for Buying and Selling Property in Thailand
Every person residing in Thailand, regardless his/her nationality shall be responsible to pay taxes and fees when buying or selling property. These taxes and fees are as follows:
1. Transferring Fee :
The Transferring fee is 2% of the registered value of the property. Whether, the buyer or the seller is paying for this fee, this depends on the Sale and Purchase Agreement. Normally the buyer partly pays for this fee. This fee will be paid to the officer at the land office, on the day of the transfer of ownership.
2. Stamp Duty :
Buyer or seller is subject to a 0.5% Duty Stamp from either the appraised value of the property or actual purchasing price, whichever is higher. The parties reliable for this additional 0.5% of Stamp Duty can be agreed in Sale and Purchase Agreement. Stamp Duty is to be imposed unless the Specific Business Tax (SBT) is paid.
3. Specific Business Tax (SBT) :
SBT will only be imposed if you are selling your property, which you have owned for less than a period of five years. The tax rate is 3.3% of the selling or assessed price of an asset (whichever is higher).
4. Withholding Tax :
Individuals selling their property: the withholding tax is determined by the Revenue code of Thailand. The seller shall withhold such tax and pay to the Revenue Department, when he/she earn an income from the sale of immovable property (including condominium unit). Withholding tax rate are calculated based from government assessed price with a deduction of possession year, which are varied depending on the year of your possession (the more years of possession, the more the deduction) and calculate that amount based on the income form the progressive tax rate (range from 0 - 37%).
Company selling their property : the withholding tax of 1% from appraised value of property or actual selling price, whichever is higher, must be paid by the Seller.
However, there are no property taxes as such in Thailand that are exactly equivalent to the property taxes in the West. Commercial properties incur a small tax which is collected infrequent.
In term of registering a lease agreement, a registration of a lease for duration of more than 3 year required to pay a registration fee rate of 1% plus a 0.1% rate of stamp duty. Rates are calculated from the total amount of the rental fee or the key money or both.
Thailand Property Taxes
Transfer fee :
2% of the registered value of the property.
Stamp Duty :
0.5% of registered value. Only payable if exempt from business tax.
Withholding tax :
1% of the appraised value of the property.
Business tax :
3.3% of the appraised value of the property if selling within 5 years. This applies to both individuals and companies.
2% of Registered value
0.5% of Registered value
1% of appraised value
3.3% of appraised value
Tax and Cost Calculation for Transferring Property
Example of how to calculate the taxes and cost
– Suppose that the government assessed price is Baht 50,000 per Sq.m.
– All areas are 100 Sq.m.
– The total assessed price is Baht 5,000,000
– Actual selling price is 6,000,000
– The Seller possessed this property for 3 years
1. Withholding Tax :
The government assessed price = 5,000,000 Baht
Deduction with the expense of possession for 3 years for 77% = 3,850,000
Balance = 1,150,000 (5,000,000 - 3,850,000)
Divided by the 3 year of possession Balance = 383,333.33 (1,150,000/3)
Taxation on progression rate
1 to 80,000 = exempt
80,001 - 100,000 = 5% (1,000)
100,001 - 383,333.33 = 10% (28,333.23)
Total = 29,333.23 (1,000 + 28,333.23)
Multiply by the year of possession = 87,999.69 (29,333.23 x 3)
In this case withholding tax is Baht 87,999.69 (A)
2. The government fee of transfer of ownership :
Is 2% based on the government assessed price so 5,000,000 x 2% Balance = 100,000
Transfer fee is 100,000 (B)
3. Stamp duty :
in this case is exempt. This is because transaction is subject to the specific Business Tax (possession of less than 5 year before sale).
4. Specific Business Tax :
3.3% for Specific Business Tax based on the government assessed price or sale whichever is higher. In this case sale price is higher than government so 6,000,000 x 3.3% = 198,000.
Specific Business Tax is Baht 198,000 (C)
Total expenses are Baht 385,999.69 (A+B+C) NB Important this is a worse case example and in normal cases we can get this liability down to 50- 100,000 baht
The Above is the official proceedure however there are a number of things you can do to limit your liability, "CALL US" on the numbers below to find out more.
Tel: (English) ++66 (0806 707 036)
(ไทย) ++66 (088 310 5806)