Define Property Transfer Fees

Transfer costs of real estate in Thailand refers to transfer fees, duties, taxes lieved by the government when transferring ownership of real estate.

Transfer Fee 2% of the appraised or registered value of the property (the responsible person can be the seller or purchaser or shared equally or whatever shared amount, This depends on the sale purchase agreement, however for condominium development or housing development, sharing half-half between seller and purchaser is minimum standard required by law, the purchaser can by law be asked to pay half or less of the transfer fee)

Business Tax 3.3% registered value or appraised value (whichever is higher), this tax is applied when the owner/seller sell the land during 5 years from their acquisition or applied for condominium and housing development, if the owner/seller sell the property after 5 years from their acquisition and the property is not subject to condominium or housing development they will be exempted but the stamp duties will apply in this event.

Stamp Duty 0.5% over the registered value or appraised value (whichever is higher), this tax will apply if the transaction is exempted from business tax.

Withholding Tax, there are 2 rates depending on the status of the owner; If the property owner is Thai company, 1% registered value or appraised value (whichever is higher) will be applied. If the property owner is individual, there is a specific formula for calculation depending on how they acquire and how long they have owned the property. 

Appraised or registered value is an actual evaluation price of the land which calculated by the land office by reference to each area at which the land situated and some more criteria set out by the Land Department of Thailand (the appraised or registered value of a house by the Land Department depends on the floor area of the house, number of floors, materials used (e.g. wood or concrete) and location).

Specific Business tax shall be payable if the seller sells the property within five years of the purchase registration date. The transfer is not subject to business tax if the seller is an individual and has possessed the property for more than five years before the transfer. Companies with specific objectives/ business purposes are subject to Specific Business tax irrespective the period of ownership.

If the seller is subject to any Specific Business tax, the seller is exempt from the payment of the Stamp Duty. However, if the stamp duty has been paid to the Land Department, the seller shall have the right to claim for the refund in full within 6 months after the payment.

Withholding Personal Income Tax depends if the immovable property is acquired by inheritance or gift or if the sale and purchase of the property has a trade or profit seeking purpose or not, usually the final Withholding Personal Income Tax income shall be calculated at progressive rate with a deduction depending on the number of years of possession. it is advisable to contact a tax lawyer or an account for specific advice.

In order to boost the real property sales business and the real property development business the Thai government has extended the tax breaks for property buyers for another year till 2010. The transfer fee rate from 2% to 0.01% and specific business tax from 3.3 % to 0,11%