27 Mar 2024
WHAT ARE THE FEES AND TAXES RELATING TO A PROPERTY PURCHASE IN THAILAND AND WHO PAYS FOR THEM?
This is a question that we are often asked and the actual amount will depend upon the land office assessed value of the property in question and this may differ from the actual purchase price. The easiest way to understand the fees for budget purposes is to look at the percentages that will be incurred. You can expect the following fee structure;
Transfer Fee
The Land Department will charge 2% of the appraised value of the property and this may be different from the actual purchase price.
Business Tax
The Business Tax is assessed at 3.3% of the appraised value. However, it’s only payable if the property is sold within the first five years of the ownership by the same person. If not, then the stamp duty will be imposed.
Stamp Duty
A Stamp Duty of 0.5% of the total registered value of the property will be imposed. When specific business tax is applied, stamp duty is not required, so it is either one or the other.
Withholding Tax
Whether Withholding Tax is applicable depends on whether the seller is a company or an private individual. Withholding Tax for a company is fixed at 1% of the appraised value or 1% of the sales price, whichever is higher. Withholding Tax for an individual person is calculated at a progressive rate depending on the appraised value of the property. The land office will provide an actual calculation and this can often be requested in advance.
WHO PAYS THESE TRANSFER FEES AND PROPERTY TAXES?
In a typical transaction, the buyer and the seller will both pay the transfer fee on a 50/50 basis. The remaining different type of taxe are paid for by the Seller. This said, both parties can negotiate between themselves and decide on an appropriate basis if any taxes will be paid by each party. In some cases, depending upon the sales price, each party may pick up a portion more as a gesture of good will.
IN SUMMARY
Transfer Fees - 2% - Buyer
Specific Business Tax - 3.3% - Seller
Stamp Duty - 0.5% - - Seller
Withholding Tax - 1% or progressive rate - Seller
Leasehold transfer of properties incure a 1% Registration fee and a 0.1% Stamp Dury based upon the Term.