Buying or Re-selling a Condo in Thailand? Let Pro Legal Services Sort Out the Tax.
Updated: Dec 11, 2019
One look at the Bangkok skyline and it’s easy to understand why condominiums are big business. High-rise buildings blanket the horizon, with two-thirds of all property being residential.
There’s a lot of living space to buy and sell each year and a ton of money involved as well - the residential market has an annual value of THB 400 billion.
Whether you are buying a new unit from a developer or transferring condo ownership through a private transaction, the Thai government requires a percentage of the deal. Understanding the ins-and-outs of the condominium transfer tax will save time and money.
The total transfer fees and taxes could range from a small sum to a relatively larger amount depending on the amount of income tax involved for the seller. Transfer taxes and fees also vary depending on the agreement of shared costs between the seller and buyer.
Pro Legal Services negotiate fair costs between buyer and seller, accurately calculate taxes and fees, and find ways to alleviate the total tax due. Call us to chat about your case!
Transfer tax and fees in a new condominium project:
Developing and selling new condominiums is a contract controlled business with a condition that the buyer of a new unit, or an off-the-plan purchase of a condominium, will only be charged half of the 2% ownership transfer fee. All other duties and taxes related to the registration and transfer of ownership must be paid by the developer.
It is common for condominium developers in Thailand to pass on the total transfer costs to the buyer which is against the law.
Transfer tax and fees of an existing re-sale condo:
How ownership transfer fees and taxes are split in a private sale, and at what percentage, depends on the agreement between the seller and buyer. There are no fixed rules or legal requirements on how to split these costs, so it can vary from seller-pays-all to buyer-pays-all (which could include paying the seller's personal withholding tax).
It is advisable for a purchaser of a re-sale condominium to clearly confirm with the seller in the condominium sale and purchase agreement who will be responsible for transfer fees and all taxes and at what percentage.
§ Transfer fees - rate = 2%; the buyer's duty or shared
§ Specific Business Tax (SBT) - rate = 3.3 %; the seller's duty
§ Stamp duty - rate = 0,5%*; the seller's duty
§ Withholding tax (income) - rate = 1% or progressive rate**; the seller' duty (as this relate to the seller's personal or corporate income tax)
* Note: stamp duty does not have to be paid if specific business tax is applicable (sold within 5 years of acquisition).
An example condo transfer tax calculation in Thailand:
The Thailand transfer sample tax and fees indicated below are based on the transfer of a condominium apartment unit in Thailand, with an appraised and registered sale value of 5 million Thai Baht and 3 years of ownership by the current owner.
§ Transfer fee 2% over 5,000,000 THB = 100,000 THB
§ Specific Business Tax Local Tax 3.3% = 165,000 THB
§ Individual Withholding Tax approx. 100,000 THB
§ Application fee and others approx. 300 THB
All fees are paid at the local land office. There are other legal nuances included in the tax, like if you are obtaining a long-term leasehold interest in a condo. The accountants at Pro Legal Services are ready to interpret your case, alleviate stress, and save you some cash.
Whether you are buying or selling a condo, we can help. Contact us!