As in most countries, when you buy a property in Thailand there will be either local authority or government fees and taxes to pay. Those taxes in Thailand, however, are some of the cheapest in the world, but How low are the fees exactly?
While the taxes and fees are relatively simple, they are not always uniform, as they depend on either the developer (for a new build), or on the seller’s situation (with a resale). On a resale, you will likely be expected to share fees 50/50 with the seller. These will vary depending on the length of time the seller has owned the property, and the actual capital gain they have made during that time. If the seller has owned the property for more than 5 years, these costs shouldn’t amount to more than 1-2% of the purchase price (if shared).
Depending on where you live, you may be required to pay for a title search, valuation, survey, or Stamp Duty. The fees are clear and easy understand, and Thai law prohibits a developer from charging more than 50% of the fees on a new build. On a private sale the law does not specify which fees should be paid by which party, however, it is accepted practice that the buyer and seller should split the fees 50/50. If you have doubts or questions about the fees you are being asked to pay, contact your agent or lawyer for advice on what the split should typically be.
Please note that while freehold condominiums are recommended over leaseholds, the upgrade to freehold usually entails an extra charge. This may be either a fixed THB amount or a percentage, but it will not necessarily be included in the initial purchase price.
When buying property the fees are typically as follows:
If you are living in your property, or if it remains empty for most of the year, you do not need to pay this tax. Typically collected locally, a tax of 12.5% apples to your assessed annual rental income.
If you are renting out your Phuket property, you must also report and pay tax on the rental income. While this may sound ominous to some, the progressive tax rates in Thailand are actually very attractive. In fact, the tax payable on rental income of US$ 1,500 p.m. (US$ 18,000 per year) would actually work out to less than 3%, while the total tax payable on rental income of $144,000 per year would still be less than 15%.
The other conveyance fees, typically paid by the seller, include:
Application Fee: negligible (circa THB 500)
Specific Business Tax (SBT): 3.3%*
Stamp Duty: 0.5%*
Income Tax: 1% of the appraised value for corporations (marginal income tax rate for individuals)
*Stamp Duty and SBT are mutually exclusive (you pay one or the other)
A business will always pay the SBT + 1% Corporate Income Tax (also called a “withholding tax” because the Land Office withholds it for the tax department). Withholding tax for individuals is their marginal income rate, although the appraised value is reduced the longer you have owned the property, which means less withholding tax.
An individual selling their condo may avoid the SBT, instead paying the 0.5% Stamp Duty, if they have held their property for at least 5 years. The SBT may also be replaced by Stamp Duty if the transfer is to a legitimate child, or if the condo is being passed down as inheritance to a legal heir.
The fees for buying or selling landed property, are for the most part as above. If a company is the seller, the total fees should come to no more than 6.3%. While some developers split these with the buyer, or itemise fees separately, others require the buyer to pay the full amount.
As an owner of the property, the House and Land Tax and income taxes on any rental income (mentioned above) would also apply.
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