29 Mar 2023
PhuketProperty.com; When investing in real estate in Phuket, it’s important to be aware of the fees and taxes associated with registering a property at the local land office. Property transfer fees and taxes are among the most significant costs associated with purchasing real estate in Phuket. In this blog post, we will explore these fees and taxes in more detail.
The Transfer Fee
One of the most important fees to be aware of when registering a property in Phuket is the transfer fee. This fee is set at 2% of the property’s government assessed value. The government assessed value is the value of the property determined by the government for tax purposes. This fee is usually split equally between the buyer and seller, but can also be negotiated as part of the sale agreement.
It’s important to note that the transfer fee is based on the government assessed value of the property, which can be lower than the actual market value. The government assessed value is typically much lower than the actual market value, which can lead to a lower transfer fee than expected.
The Specific Business Tax
Another significant tax to be aware of when transferring a property in Phuket is the Specific Business Tax. This tax is calculated at 3.3% of the government assessed value or the sale price, whichever is higher. This tax is applicable if the property is being sold within five years of purchase. If the property is being sold after five years or more, the tax is waived.
The Specific Business Tax is paid to the local jurisdiction’s Revenue Department on behalf of the seller. In some cases, the seller and buyer may negotiate this fee to be paid by the buyer. It’s essential to clarify all these details before completing the sale.
Another tax to be aware of when registering a property in Phuket is the income tax. Income tax is levied on the profit made from the sale of the property. The tax rate varies depending on the ownership structure of the property.
If the property is registered under a Thai company, the income tax rate is 20% of the profit made on the sale of the property. However, if the property is registered under a foreign company or individual, the income tax rate is up to 37% of the profit made on the sale.
It’s important to note that income tax is waived if the property has been held for more than five years or if the property is bequeathed to relatives. This can have significant implications for foreign investors who are looking to make a profit by selling property in Phuket.
Apart from these fees and taxes, other costs associated with registering a property in Phuket include legal fees, stamp duties, land survey fees, and property valuation fees. These fees can vary depending on the specific case and the services provided. It’s essential to get a breakdown of all the fees associated with registering a property in Phuket to avoid any surprises during the registration process.
Investing in property in Phuket can be a lucrative opportunity, but it’s important to be aware of the fees and taxes associated with registering a property at the land office. The transfer fee, Specific Business Tax, and income tax are the most significant costs associated with registering a property in Phuket. Investors should also be aware of other fees, such as legal fees and stamp duties.
Overall, it’s important to consult with professionals who understand the applicable taxes and fees involved in purchasing and registering a property in Phuket. Working with experts can help investors save money and can provide peace of mind during the registration process. With a solid understanding of the fees and taxes associated with property registration in Phuket, investors can take advantage of the many opportunities available in this beautiful paradise.