Thailand Property Law: Transfer Tax and Fees

Standard tax rates for transferring real estate property (land, land and house, condominium)

Standard normal rates:

1. Transfer Fee 2% over the appraised value of the property
2. Business Tax * 3.3% registered (sale) value or appraised value (whichever is higher)
3. Stamp Duty 0.5% over the registered value
4. Withholding Tax 1% (if the seller is a company) registered sale value or appraised value (whichever is higher)
5. Personal withholding is charged at a progressive rate for individuals (exemptions are applied in certain situations)

Sharing the transfer costs

In a normal sale and purchase or transfer of ownership of a real property in Thailand there is no fixed rule who pays the transfer fee, stamp duty, specific business tax or withholding tax. As a standard rule the following general formula for sharing the transfer fees and taxes is advised in a private sale and purchase of real estate:

The above fees and taxes are paid in the land office when transferring the property. The sale and purchase agreement should specify who will be responsible for the above taxes and fees.

Only in a licensed housing or condominium development the law states that up to half of the transfer fees may be transferred to the buyer by the developer. All other transfer costs are by law the responsibility of the developer, even though it is common that a higher percentage is agreed in the sale and purchase agreement.

Sample calculation transfer costs of a condominium

Sample calculation for the transfer of a condominium unit with a 5 million baht value and 3 year ownership by a private owner at the time of transfer under the reduces rates and normal rates. In case the seller is a company the withholding tax is fixed at 1%. These amounts need to be paid at the Land Department at the time of the transfer (the final exact fees are calculated by the Land Department based on the actual sale price or appraised value). This is a sample only:

• Related: Thailand Revenue Department's tax calculator

What is Appraised Value, Business Tax, Stamp Duty and Transfer Fees

Appraised value is an actual evaluation price of the property calculated by the land office by reference to criteria set out by the Land Department of Thailand. The appraised value of a house by the Land Department for example depends on the floor area of the house, number of floors, materials used (e.g. wood or concrete) and location.

Registered value is the actual registered sale price.

Specific Business Tax is charged at a rate of 3%, plus a municipal tax of 10% on the amount of the specific business tax, bringing the total tax to 3.3%. This is charged if the seller is a company (specific exemptions applied), or if the seller is an individual and sells the property within five years of the purchase registration date. The transfer is not subject to business tax if the seller is an individual and has possessed the property for more than 5 years before the transfer. Other exemptions are for example if the seller transfers the real property to a legal heir or heir by a will or the seller transfers the real property to a legitimate child (there are other specific exemptions). Companies transferring property are subject to Specific Business Tax, irrespective the period of ownership but there are exemptions depending on the business objectives of the company.

Stamp Duty depends if the seller is subject to any Specific Business tax. In case Specific Business Tax is paid the seller is exempt from the payment of the Stamp Duty. However, if the stamp duty has been paid to the Land Department, the seller shall have the right to claim for the refund in full within 6 months after the payment. Specific Business Tax 3 % + local maintenance tax at the rate of 10% charged over the business tax, calculated over the registered value or actual sale price (whichever is higher).

Withholding Personal Income 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 or not, usually the final Withholding Personal Income Tax income shall be calculated at progressive rate with a deduction depending on the number of years of possession.

• Building and land tax (who has to pay building and land tax in Thailand)
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Tax reduction: expired March 29 2010