See what the property transfer taxes are in Thailand. If you are going to buy a condominium in Phuket then you should have a property lawyer in Phuket calculate the transfer duty and taxes for you. The transfer costs are also split between the buyer and the seller. Before you buy a condominium always do a due diligence on the property before you sign the sale agreement or provide a deposit on the sale.
Property Transfer Taxes
There are a number of taxes on the property when the property is transferred. Some of these would not applicable in all transfers as explained below. The most common transfer taxes are the transfer fee, stamp duty, withholding tax (personal or corporate) and the specific business tax (if applicable). These are the basic for transfer costs.
On a new condo being bought off-plan the law states that the transfer fee cannot be more than half of 2% of the value of the sale. Most times the cost is shared in Thailand however all other taxes and duties are to be paid by the seller of the property. Buying an existing condo the taxes would depend on the sellers income tax liabilities. The basic breakdown would look as follows:
|Transfer fees||rate= 2%||the buyer’s duty or shared|
|Specific Business Tax (SBT)||rate= 3.3 %||the seller’s duty|
|Stamp duty||rate= 0,5%*||the seller’s duty|
|Withholding tax (income)||rate= 1% or progressive rate||the seller’ duty|
Stamp duty does not have to be paid. Only if the specific business tax is applicable during the transaction. Note that when a privately owned condo is sold within 5 years of acquisition. Then the sale is considered ‘sale of an immovable property in a commercial or profitable manner’ and is then subject to 3,3 % specific business tax (assessment tax). This is calculated over the government appraised value. Which is the (Municipal value in the West) or actual sale price of the unit, whichever is higher.
Property Taxes and Inheritance
This was an important reason why property flipping in Thailand became unprofitable. It also ensured that a property bubble did not occur in Thailand during the European crisis. This your attorney will be able to tell you from the title deed over the property. The seller has to pay this duty.
If however the property is transferred from parent to child or as an inheritance then the taxes are 2%. If the property was in the name of a Thai company then the taxes are 3.3% irrespective of how long the property was owned and the corporate withholding taxes are 1% of the value of the property.
Important. You need to show your Tor Thor 3/ FET Form or credit when buying property in Thailand. This needs to be arranged by your bank. Also this money must be shown to have come from outside of Thailand for this specific property purchase. If you have never done this before. Then speak to an attorney to help you arrange the transfer documents for the sale.
All take legal advice from an attorney in Thailand when buying property or even leasing property.