Specific Business Taxes
If you are buying property in Thailand, then there are a number of taxes which need to be paid. One of those taxes paid by the seller of the property is the specific business tax and this is explained below. You can see on the other page what the property transfer taxes are in Thailand or what you would call the conveyancing fees in Thailand.
Specific Business Taxes
As you might know that the stamp duty is exempt if Specific Business Tax is charged on the property transfer. The total is 3.3% of the value of the property and this is constituted as a 3% business tax as well as a municipal tax of 10% which has been assessed on the total of the specific business tax 0.3% which is a total of 3.3% specific business tax.
The specific business taxes for an individual is not payable under the following circumstances:
- Property Flipping
If the seller of the property you are buying has been the owner of the property for more than five (5) years before the transfer would not be liable to pay this tax. This is on condition that the seller has had the property as his principal place of residency and that the seller of the property can show and prove that the name of the seller was on the house registry as least one year from the date of having bought the property. This is why the government brought in this tax to dampen the property market on speculation and also why the seller always pays this tax. Speak to a property lawyer in Thailand about this as rules do change.
If the seller is transferring the property to their legal heir or by a will. In the US they would call this probate or the administration of estates in the UK where there is not specific business taxes when the property is transferred out of a last will and testament.
- Family Ownership
If the seller is going to transfer the property to their legitimate child. Note however that these do not included adopted children that you might have.
- Property Donation
The seller or owner of the property is donating the property to a government agency or to a church, mosque or temple. This taxes is not applied during these type of property transfers.
If you are going to buy property in Thailand or buying land in the name of your Thai wife you will need to view what the overall cost would be. This business tax during conveyancing or property transfer is to stop speculation in the property market as the government did not want to create a property bubble. Always take proper legal advice from a property lawyer in Thailand if you are not certain as rules and regulation do change as well as how they interpret the laws.
When buying a condo in Thailand you should always ask the seller how long they have owned the property as well as if the property is his primary address. The reason is that the transfer taxes will be higher and they might want to work this cost into the selling price.
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