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Tax on Property Transfer in Thailand

Posted by Admin_Zelleth on March 4, 2016
Buying Properties, Location, Price, Real Estate
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When transferring property in Thailand, several taxes and fees are applicable. Here is a detailed overview of the taxes and fees involved in a property transfer:

1. Transfer Fee

  • Rate: 2% of the appraised value of the property.
  • Payment: Typically, this fee is shared equally between the buyer and the seller, but this can be negotiated.

2. Specific Business Tax (SBT)

  • Rate: 3.3% of the higher value between the appraised value and the actual sale price.
  • Applicability: This tax is applicable if the seller has owned the property for less than five years or if the property is being sold by a company.

3. Stamp Duty

  • Rate: 0.5% of the higher value between the appraised value and the actual sale price.
  • Applicability: Stamp duty is only applicable if the Specific Business Tax is not applicable. Therefore, if SBT is paid, stamp duty is not required.

4. Withholding Tax (Income Tax)

  • Rate for Individuals: Calculated on a progressive scale based on the official appraised value and the duration of ownership, similar to personal income tax rates. The exact rate varies depending on the length of time the property was held and the seller’s income bracket.
  • Rate for Companies: 1% of the sale price or the appraised value, whichever is higher.

5. Local Development Tax (if applicable)

  • Applicability: Applies to land sales, especially for undeveloped land. The rate varies depending on the size and location of the land.

6. Additional Fees

  • Legal Fees: Costs for hiring a lawyer to assist with the transaction. This fee varies depending on the complexity of the transaction and the lawyer’s rates.
  • Administrative Fees: Small fees for administrative processes at the Land Office, which are usually minimal.

Summary of Payment Responsibilities

  • Buyer: Typically pays the transfer fee (2% of appraised value) and their own legal fees.
  • Seller: Typically responsible for the Specific Business Tax (3.3%), Stamp Duty (0.5% if applicable), and Withholding Tax.

However, the exact responsibilities can be negotiated and stipulated in the sale and purchase agreement.

Example Calculation

For a property with an appraised value of THB 10,000,000 and a sale price of THB 12,000,000:

  • Transfer Fee: 2% of THB 10,000,000 = THB 200,000
  • Specific Business Tax: 3.3% of THB 12,000,000 = THB 396,000 (if applicable)
  • Stamp Duty: 0.5% of THB 12,000,000 = THB 60,000 (if SBT is not applicable)
  • Withholding Tax: Varies based on ownership duration and the seller’s income bracket.

These fees are paid at the Land Department during the transfer of ownership. It is essential to consult with a legal professional or a real estate expert to understand the full implications of these taxes and ensure compliance with all local regulations

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