Thai Property Taxes and Land Transfer Fees
Whenever a property in Thailand is bought or sold various taxes have to be paid. Many buyers (especially foreigners) fail to take these into account. It should be decided beforehand whether the buyer or seller will be responsible for paying these. Because of the local system of taxing property on an arbitrary assessed value as determined by the Land Department rather than true market value, these taxes could amount to a considerable percentage of the purchase price. Here is a general guideline, although tax % levels are subject to changes from time to time and government to government.
Thailand Property & Land Taxes
| Category | Sale of Freehold Land & Property |
Transfer of Leasehold Land | Sale of Building | Liability to Tax |
| Transfer Fee | 2% | N/A | 2% | Seller/Buyer |
| Lease Registration Fee | N/A | 1% | N/A | Lessor/Lessee |
| Specific Business Tax | 3.3% or N/A | N/A | 3.3% or N/A | Seller |
| Stamp Duty | 0.5% or N/A | 0.1% | 0.5% or N/A | Seller |
| Withholding Tax | 1% or 5 – 37% | N/A | 1% or 5 – 37% | Seller |
Which of these taxes/fees will be applicable depends on the details of the transaction, the seller and the duration of the seller’s ownership. It is also significant to note that most of the fees are calculated relative to the government’s “tax assessment value” of the property and this value is usually well below the market value.
Transfer Fee
This is based on the appraised value of the property and is normally shared equally between both buyer and seller, although this needs to be agreed by both parties.
Lease Registration Fee
This is based on the total rent payable over the lease term, and is normally shared equally between the lessor and lessee, although this must be agreed by both parties.
Specific Business Tax
Specific Business Tax (SBT) is payable by companies and individuals who have owned the property for less than five years. It is based on the official appraised value or the contracted price, whichever is highest.
An individual may be exempt from SBT if they have used the property as their principal residence and have had their name in the household registration certificate for at least one year.
Stamp Duty
Stamp Duty is only paid when SBT is not applicable and is based on the official appraised value or the contracted price, whichever is highest.
Withholding Tax (WHT)
If the seller is a company, the WHT on the sale of the property is calculated at 1% of the official appraised value or the contracted price, whichever is higher. If the seller is an individual, the WHT is based on the individual’s marginal tax rate (except that the first 100,000 baht is taxed at 5% rather than falling under the tax-free threshold) after deducting from the official appraisal price a standard deduction based on the number of years of ownership.
Once you have acquired the property, you must pay property taxes on it.
If you rent out the property, the tax is 12.5% per year on the annual rental revenue.
There is also a tax on non-rental property. This depends on location and land classification, and varies from 0.25% to 0.95% a year.
In addition, if the house is purchased through a company, one has to bear in mind that corporate tax is higher than personal tax, and the cost of setting up the company has to be considered as part of the initial investment outlay. Then, when you want to sell the property, it is simply a matter of transferring the shares of the holding company to the buyer, without the necessity of re-registering the land titles. There are of course costs and fees involved in this exercise, but typically only a few thousand Baht all told. Again, get a professional business representative or lawyer to do it all for you.
Selling a property, without a company holding the title, you may be liable or all of the fees that were applicable at the time of purchase (see above). You would also have to pay income tax on the sale amount.
- For sale of inherited, non-commercial or non-investment property, the final tax figure must be no more than 20% of the sale price.
- No matter how long you have held the property, the number of years you use in the division and multiplication process for the tax calculation cannot exceed 10.
There are also certain special cases where the income tax does not apply:
- The property is inherited or is an unsolicited gift, and is in a rural area, and the sale price is no more than 200,000 Baht.
- The property is given to your children, or is appropriated by the government.