So your budget for buying a property in Thailand is set, but have you factored in the Thai property sales tax and transfer fees?
Taxes and fees occur when buying or selling property under Thai or Foreigner freehold, as well as when acquiring or renewing leasehold property.
Transfer costs of a title deed (chanote) typically amount to roughly 6.8% of the estimated property value.
According to the letter of the law, the seller is meant to pay the taxes and stamp duty, and the transfer fee is shared 50-50 by both buyer and seller. However, it is much more common for all the fees to be split 50-50 between the buyer and the seller. Of course, this can all be discussed during negotiations.
It is important to note that the business tax and the withholding tax is calculated based on the registered selling price or the appraised value of the property—whichever is higher. The Land Department and Treasury Department adjust these figures every four years. This is done so as to ensure the buyer and seller can’t game the system by stating a far lower sales price than what was actually agreed upon. The transfer fee and stamp duty are calculated on the appraised value of the property.
The treasury department has a calculator for estimating property value on their Assess Price website. Please note the website is in Thai, but Pulse is able to provide the Treasury Department’s official valuation to clients so long as owners provide the information required. While this value isn’t the final figure recognized by the Land Department, their officials do use the valuation as a base from which they calculate their final valuation on the day of closing. Contact us for more specific information on official valuations.
Business Tax – levied on companies and individual owners who have held the property less than five years
Transfer Fee – charged by the Land Department and collected on the day of ownership transfer
Withholding tax – varies slightly depending on ownership (individual or company)
Stamp Duty – not imposed when Business Tax is due
The above property tax and transfer fees do not apply to leasehold transactions.
Lease Registration Fee
The leasehold registration fee for property is calculated at 1%, while a stamp duty of .1% is also applied. This results in a 1.1% fee applied to the total amount of the lease over the duration of its full term. This is collected by the Land Office at the time of registration.
Transfer Fee of Leasehold Property in Thailand
The same 1.1% applies here, but now only for the value of the remaining term on the lease agreement. To calculate the remaining value, you take the full amount of the lease, divide it by the total amount of years and multiply it by the remaining years on the lease term.
For example. If a 30-year lease is purchased for 10m THB, and the lease is transferred after 15 years, the remaining value is 5m THB.
Just as with the registration of a lease, the transfer fees are to be paid during the time of transfer at the Land Office. Fees are typically paid by the buyer or shared equally by the buyer and seller.
Renewal Fee of Leasehold Property in Thailand
The fee here is typically based on the original cost of the lease, or an evaluation from the Land Office.
Generally, rental income earned by non-resident (foreign) owners is subject to 15% withholding tax whereas rental income earned by Thai tax resident is subject to 5% withholding tax.
*Note: Applicable tax rates are current but may be subject to change by the relevant Thai authorities.
If you still have questions about the transfer fees and taxes in Thailand, do not hesitate to contact us
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full and managed with reasonable care, it is about the safest investment in the world.”
- Franklin D Roosevelt