Transfer of realty

Fees and tax rates for the transfer of property explained by lawyers in Issan by Koarat, Roi Et, Surin, Buriram, Khon Kaen.

Source: Thailand Law Online

The standard transfer taxes for immovable property in Thailand are:

1. Transfer fee of 2 percent (%) over the appraised value (as opposed to registered sale value) of the immovable property at the Land Department
2. Specific Business Tax is charged over the appraise land office value or actual sale price (whichever is higher). The tax rate is 3,3% and consist out of a actual 3% Business Tax + a local maintenance tax of 10% over the amount of business tax. The property 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 generally must pay this tax irrespective the period of ownership, however some specific companies are exempt from Specific Business tax.
3. Stamp Duty is charged at a rate of 0,5% over the registered or actual sale pice (whichever is higher) has to be paid if the sale is not subject to Specific Business Tax. In case Specific Business Tax and Stamp Duty has been paid to the Land Department, the seller has the right to claim for the refund of this amount within 6 months after the payment.
4. Withholding Tax for individuals depend 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. Withholding Personal Income Tax income shall be calculated at progressive rate with a deduction depending on the number of years of possession or if the seller is a company (but there are specific reductions or exemptions).
5. Withholding Tax for companies is fixed at a rate of 1% over the registered sale value.

Who pays the above transfer fees and taxes?

The fees and taxes mentioned above are paid at the the time of transfer of the property at the land department. The land department will calculate the amounts and issue receipts for these payments. It has happened that purchasers of realty in Thailand were forced to pay a percentage of these fees exceeding what they were expecting to pay because there is no rule how these costs are divided.

This should be negotiated as part of the contract and purchase price. It is recommended to exclude clearly sharing the seller's personal withholding tax. The buyer should for example agree only to be liable for the transfer fees, or part of the transfer fees and exclude liability for any other fees and taxes in the private sale and purchase agreement.

Only in case of a licensed housing development or condominium development there is a fixed formula in the law and regulations protecting consumers how the above costs are shared.

Related: Personal Withholding Tax Calculator (Revenue Department Thai language)