Condominium sale and tax - withholding tax
For individuals withholding tax depends if the immovable property is acquired by inheritance or gift or if the sale and purchase of the property has a trade or profit seeking purpose.
In a normal sale the withholding income tax shall be calculated at a progressive rate with a deduction depending on the number of years of possession. If the seller is a company withholding tax is fixed at 1 % over the registered sale price or government assessed value of the property, whichever is higher.
The selling price and appraised value of your condo is 800,000 baht, and say you held ownership for a period of 2 years and 5 months (= 3 years ownership for tax calculation). There is a deduction based on the years of ownership as follows:
1 years = 92%
2 years = 84%
3 years = 77%
4 years = 71%
5 years = 65 %
6 years = 60%
7 years = 55%
8 years or more = 50%
In this case the deduction is based on 3 tax years of ownership = 77% x 800,000 baht = 616,000 baht.
The personal income withholding tax base is 800,000 baht less 616,000 baht = 184,000 baht, divided by 3 (the number of years of ownership) = 61,300 baht as the amount to calculate the yearly personal income tax.
The income tax rates in Thailand are:
Less than 100,000 baht = 5%
Between 100,000 and 500,000 baht = 10%
Between 500,000 and 1,000,000 baht = 20%
Between 1,000,000 and 4,000,000 baht = 30%
More than 4,000,000 = 37%
Note the above rates have been reduced and rescheduled in 2013, follow reference links below, or check the Thailand revenue department website for the new income tax rates.
In the sample it is less than 100,000, so 5% income tax of 61,300 baht = 3065 baht personal withholding tax times 3 years ownership = 9200 baht to be paid as personal income withholding tax at the land office.
As you owned the condo less than 5 years specific business tax is charged at a rate of 3%, plus a municipal tax of 10% over the amount of the specific business tax, bringing it to 3.3% x 800,000 = 26,400 baht. (note: specific business tax is applied over the selling price or gov appraised value whichever is higher)
The transfer fee is 2% over the appraised government value, in this sample the appraised value is equal to the sale price, so 2% of 800,000 baht is 16,000 baht
In the sample expect to pay a total of around 55,000 baht all-in at the land office. Note, the actual calculation by the land office depends on variables such as the term of ownership, the registered actual sale price and the assessed government value of the unit.