Taxes and transfer fees
Thailand has the following taxes in regards of property purchase.
1. Transfer fee - 2% of the appraised value of the property.
2a. Specific business tax (SBT) - 3.3% of the registered (sale) value or appraised value, whichever is higher (3.3% actually consists of 3% SBT tax itself plus a municipal tax of 10% assessed on the amount of the specific business tax).
- If the seller of the property is an individual person (not a company) and held the property for over 5 years, then SBT isn’t payable, and stamp duty is paid instead (this can also apply before 5 years pass in certain cases: transferring a real property to legal heir according to will, transferring it to legitimate child, transferring it without consideration to government agencies or to temples, churches or mosques).
- In case where the owner is a company (developer) Special Business Tax is normally paid.
2b. Stamp duty - 0.5% of the registered value. Stamp duty isn’t payable when SBT is payable, so there won’t be a case when you have to pay both.
3. Withholding tax. If the seller is a company, withholding tax is 1%. If the seller is a private person, it is calculated at a progressive rate based on the property’s appraised value and the duration of ownership (it is progressive until 8th year of the ownership and regressive after; it can vary from ~1.05% to ~5.60% of the appraised value).
It’s important to note that appraised value of the property (which, importantly, is used as a base for taxation for resales) is calculated by the Central Valuation Authority (CVA) and announced by the land department every 4 years. It is normally substantially lower than the transaction price.
In case of leasehold ownership, lease registration fee is payable at the rate of 1.1% of total lease value (again, technically lease registration fee itself is 1%, but 10% stamp duty is paid on it).
👉 SUNWAY COMMENT
There is no specific regulations determining who who is paying the taxes in case of a resale and how they must be split, leaving this to the discretion of the parties. Market convention is 50/50 split.
In 2019 Thai government introduced a new Land and Building Tax law, which came into power on Jan 1st 2020.
The law’s main change - for the purposes of this article - was introduction of property tax for residential properties (which were previously exempt from any kind of annual taxes).
Taxable properties in context of residential real estate include land, buildings and condominium units. The ceiling tax rate for residential properties is 0.3% per annum.
There is an exemption for the properties used as a primary residence:
- Properties valued under 50 million baht for individuals owning both land and building
- Properties valued under 10 million baht for individuals owning the building(s) but not the land, including condominiums.
In either case the individual’s name must be on the household registration documents on 1 January of that tax year; the exemption only applies to one primary residence, and cannot be applied to further properties.
Otherwise, the taxes are as follows:
1. Land and buildings owned by individuals for residential use whose names are on the household registration documents:
|THB 1M - THB 25M||0.03%|
|THB 25M - THB 50M||0.05%|
2. Buildings owned by individuals for residential use whose names are on the household registration documents:
|THB 1M - THB 40M||0.02%|
|THB 40M - THB 65M||0.03%|
|THB 65M - THB 90M||0.05%|
3. Land or buildings for residential use other than in points 1 and 2 above:
|THB 1M - THB 50M||0.02%|
|THB 50M - THB 75M||0.03%|
|THB 75M - THB 100M||0.05%|