Home | Print Version | Advertise | About Us | Contact Us | Site Map
Property Buyer’s Guide | Price Indicator | Legal Matters

Taxes on property

A range of taxes or fees apply to the transfer/registration of property ownership in Thailand, which can significantly increase the costs of acquiring property. Which fees apply depends to some extent on the circumstances/type of ownership involved; advance knowledge of how the structure works can help avoid incurring excessive transfer costs. Below is a table outlining the range of taxes and fees.

Type of tax/fee Property sale Lease transfer Who pays
Freehold Building
Transfer Fee ** 2% 2% NIL Seller/Buyer
Stamp Duty 0.5% or NIL 0.5% or NIL 0.1% Seller
Specific Business Tax 3.3% or NIL 3.3% or NIL NIL Seller
Withholding Tax 1% or 5-37% 1% or 5-37% NIL Seller
Lease Registration Fee NIL NIL 1% Lessor/Lessee
** Reduction of transfer fees originally introduced until March 2009 has been extended until 28 March 2010. Transfer fees during this period are reduced from 2% to 0.01%. Note that the reduction does NOT apply to transfer of land with no buildings on it, or to lease registrations.

Valuation for tax purposes

You will need to establish which taxes/fees are going to be based on the ‘official’ valuation of the property and which will be based on the higher of official valuation or selling price.

Transfer Fee

Based on the official valuation or the selling price, whichever is higher, this is usually shared equally between buyer and seller, although some developers will want to include in the contract that the buyer pays all – particularly with some of the lower-end developments.

Stamp Duty

Unless the transaction attracts Specific Business Tax, Stamp Duty is applicable and is based on the official valuation or the selling price, whichever is higher.

Specific Business Tax

Specific Business Tax is payable on the sale of a property by companies or by individuals who have owned the property for less than five years. The tax is calculated using the official valuation or the selling price, whichever is higher.

If the property has been used by an individual as his principal residence for one year or more, he may be exempt from Specific Business Tax. To qualify for exemption, he must have his name recorded on the household registration document (tabien baan) for the period under consideration.

Withholding Tax

A company selling property must pay withholding tax (WHT) at 1% of the official valuation or the selling price, whichever is higher. An individual’s liability to WHT is a function of his incremental income tax rates based on income level. The liability to tax is further affected by a deduction based on the number of years of ownership. (The rationale here seems to be that – if you have ‘used’ the property for, say, 10 years – this is not a straight ‘for profit’ turnaround…)

You are strongly recommended to enlist the services of a competent accountant at the outset to ensure you structure your ownership in as tax-efficient way as possible.

Lease Registration Fee

Based on the total rent payable over the term of the lease, this is usually shared equally between lessor and lessee, although some lessors will want to include in the contract that the lessee pays all.

Ongoing property taxes

Land Tax
Only a few baht per rai, this annual tax tends not to be collected on a regular basis as it is not worth the cost of collection. However, you need to ensure that there is not several decades of accumulated tax liability on your intended purchase, as the authorities may get around to collecting it – and you could end up liable for the whole amount outstanding. Your lawyer should check this as part of the due diligence process.

Structures Usage Tax
Applied only to properties used for commercial purposes, the applicable rate is 12.5% on the actual or assessed gross rental value of the property. Generally, the value used in the calculation is significantly below the commercial market rental value – but this can change…