In Thailand, the real estate market is guided by specific tax regulations. An individual or legal entity is always subject to taxation when selling property. A surprising complexity is noted in the taxation system for individuals disposing of properties. In 2023, a significant change occurred: the Transfer Fee was reduced from 2% to 1% for properties priced below THB 3 million.
Transfer Fees and Taxes
The Thai property market includes various transfer fees and taxes:
- Transfer Fee: 2% of the property’s appraised value.
- Business Tax: 3.3% on the higher of the registered (sale) value or appraised value.
- Stamp Duty: 0.5% of the registered value.
- Withholding Tax: For companies, it’s 1% of the higher of the registered sale value or appraised value. For private individuals, it’s calculated at a progressive rate based on the appraised value.
Specific Business Tax and Stamp Duty
- Stamp duty is exempt if Specific Business Tax (SBT) is charged.
- The total SBT is 3.3%, including a 3% business tax and a 10% municipal tax on the business tax amount.
- For individuals, SBT may not apply under certain conditions like property ownership exceeding five years, transfer to legal heirs, or charitable transfers
Lease Registration Fee
A lease registration fee of 1% of the total rental over the lease term, along with a 0.1% stamp duty, is charged for real estate leases.
Payment Responsibilities in Property Transfers
The division of taxes and fees in a private sale can vary. Typically, specific business tax and stamp duty are the seller’s responsibility, while transfer fees are either the buyer’s duty or shared. Withholding tax is always the seller’s duty.
Fees in New Condominium Purchases
For new condominiums bought directly from a builder, the developer may pass up to half of the 2% transfer fee to the purchaser. The developer is fully responsible for specific business tax and income withholding tax.