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Standard tax rates for transferring real estate property (land, land and house, condominium)
The standard rates as shown below (exept transfer fee) are now again applied after March 28 - 2010. See details and explanation further down this page. The Thai government extended the current transfer fee rate reduction till May 31. After May 31 2010 also the transfer fee rate goes back to the previous standard rate of 2%.
Standard normal rates:
1. Transfer Fee |
2% |
|
over the appraised value of the property (Note tax reduction below) |
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 value or appraised value (whichever is higher) |
| 4. Personal withholding is charged at a progressive rate for induviduals (exemptions are applied in certain situations) |
See details and explanation of the above Transfer Fee, Specific Business Tax, Stamp Duty and Withholding Tax further down this page.
As a standard rule the following general formula for sharing the transfer fees and taxes is advised in a private sale and purchase:
| Specific Business Tax |
the seller's duty |
| Stamp duty |
the seller's duty or shared |
| Transfer fees |
the buyer's duty or shared |
| Withholding tax |
always the seller's duty |
In a licensed housing or condominium development up to half of the transfer fees may be transferred to the buyer by the developer. 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. It can vary from purchaser pays all to the seller pays all. It is recommended to have the sale and purchase contract reviewed by a specialist as developers do pass on certain costs that they are by law responsible for and a private seller may try to pass on part of his personal income withholding tax as part of the shared costs.
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:
Transfer before March 28 31 2010 and for the transfer fees before May 31 2010(temporary rate reduction):
- Transfer fee 0.01% over 5,000,000 THB = 500 THB
- Specific Business Tax & Local Tax 0.11% = 5,500 THB
- Individual Withholding Tax approx 100,000 THB
- Application fee and others approx 300 THB
Total: 106,300 THB |
Transfer of a condo (value of 5 million) under the normal rates:
- Transfer fee 2% over 5,000,000 THB = 100,000 THB
- Specific Business Tax & Local Tax 3.3% = 165,000 THB
- Income Withholding Tax approx 100,000 THB
- Application fee and others approx. 300 THB
Total: 365,300 THB |
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.
Temporary Thailand Property Tax reduction ending March 28 2010
The temporary tax reduction and the fees have been extende for 2 months and will now return to the normal rates after May 31 2010.
This information below is meant as general info only and not intended to be comprehensive
In order to boost the real property sales business and the real property development business, the Thai government has granted temporary reduction on specific business tax rate from 3.3% to 0.11% on gross sales for all real property transactions since March 28 2008. This reduced rate now applies only to transfers of real property taking place before 29 March 2010. The transfer fee rate is also reduced from 2% to 0.01% in case of transferring a house under land appropriation law, a condominium under condominium law, an office building under building control law or the transfer is under the debt restructuring plan provided that the registration at the Land Department is made before 29 March 2010 and specified real properties:
- office building or land together with office building (the size of the land is not limited)
- condominium unit
- single house, twin house, townhouse and commercial building OR such building together with the land in the size of not more than 1 rai and not the land being under the land allocation act.
- land or building or land together with building developed under the allocation act and must be the kind of the following building
1. single house
2. twin house
3. town house
4. commercial building
The reduced rates for example do NOT apply to a private sale of a single plot of land and in this case the normal transfer fee of 2% is applied. The rate only applies to the in the regulation specified properties. The reduced Specific Business Tax applies to all property transactions.
More information: Thailand Revenue Department
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