Property Transfer Taxes
What are the property transfer taxes. If you are buying property in Thailand then you will need to know what the transfer fees are. Conveyancing fees as it is called in the West is calculated differently in Thailand and there is also a system for which party will pay which taxes. There are a number of taxes to pay when you transfer property however this will also depend on how long the former or current owner held the property for. This was introduced to dampen property flipping.
Property Transfer Taxes
The property transfer fees is 2% of the properties appraised value. The buyer and seller would normally share this cost. This would be your municipal fees in the West and the government sets this value every few years. This value is set by the Treasury Department and the Land Department in Thailand and the values are adjusted every 4 years. If would be illegal to put the incorrect value of the sale onto the sale of agreement contract.
For the transfer duty this would be irrelevant as they take the government assessed value however it becomes important for the other taxes. So in reality you will pay 1% of the value and the seller will pay the other 1% of the value. This is relevant even if you bought offplan property or a licensed condominium in a condominium project.
The following taxes are payable on a property transfer in Thailand. The buyer and the seller pay the different taxes below and you can speak to a property lawyer about which party pays which taxes:
- Transfer Fee
- Business Tax
- Stamp Duty
- Withholding tax
The next cost is the Specific Business tax. This is where the actual price become important as the business tax is based on 3.3% over the sales value or appraised value, whichever is higher. This business tax is paid by the seller. If you are buying a condo in Thailand the property developer will pay the business tax during the transfer process. Note that the calculation is done as follows – (The 3% business tax PLUS a municipal tax of 10% on the amount of the specific business tax which is 0.3% or 3.3% in total.)
Stamp Duty and Withholding Taxes
Stamp Duty is also payable of 0.5% of the value of the property. This tax is also payable by the seller and you will need to speak to a lawyer about this. How and where these transfer duties get paid. As you can see that the transfer duty in Thailand. Is a bit more complex than standard conveyancing fees in the West. Note however that stamp duty is exempt if there is Specific Business Tax being charged. See the article on this website about the specific business tax during a property transfer.
There is also a withholding tax which is paid for by the seller. If the company is the seller then there is a 1% tax on the appraised value of the property. Tthis or the sales price whichever is higher. If however the seller is a private person then there is a progressive rate on the property. This depending on how long the owner had owned the property. This is explained elsewhere on this website as well. If you cannot attend to the property transfer then you will need to sign a power of attorney to manage the property transfer with your property lawyer in Thailand.
