Transfer Taxes in Thailand

When buying property in Thailand the Thai government did not want to see the creation of a property bubble like we had in the US. In order to minimize the risk the decided to discourage property speculation in order to keep the property market stable. This they have achieved in a number of ways. The first line of defense was making use of additional taxes if the property has not been held for a long time. The shorter the time period of ownership the higher the transfer taxes would be.

Before you buy property in Thailand always check with a property lawyer in Thailand first. Also ensure that you have a customer due diligence report done on the property as well to ensure that your investment is secure. These are the basic as to property transfer taxes when buying any real estate in Thailand.

Business Taxes: 3,3% of the municipal value or sale price, whichever is higher. This is levied against a seller who has only been in possession of the property for less than 5 years. (Property Speculation Mechanism)

Stamp Duty: 0,5% of the registered value of the property being bought. Normally paid by the seller.

Transfer fee: 2% of the registered value of the real estate and this is normally paid for by the buyer.

Income Tax: This is the profit on the sale of the property and is paid for by the seller like the business tax.

 

Check with your attorney as to what the municipal value is of the property and then compare this with the selling price to calculate your approximate property taxes when the property is transferred. As stated above you need to do a due diligence report on the property and developer so when you have the report you will known what you are getting and also all the taxes has been calculated for you. Considering that the property market in Thailand is unregulated it is always best to ensure that there are no problems later as litigation is costly and takes years to complete.

 

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