Property Taxes in Thailand
Calculating the total expenses to transfer property ownership is complicated. In order to calculate the total taxes and fees for the transfer, you will need to know the following:
- The current appraised value of the property (get from local land office)
- The registered sale price
- Is the property owned by an individual or company?
- What time period (years) was the property owned (held) by the seller.
- Reference to the data indicated in tables 1 & 2 below.
Thailand Property Taxes and Fees:
Transfer fee – 2% of the current appraised value of the property (*usually paid by the buyer).
Withholding tax – If the seller is an individual, withholding tax is calculated at a progressive income tax rate (see table below) based on the appraised value of the property and the property holding period (see table below). If the seller is a company then 1% of the appraised value or registered sale value of the property, whichever is higher. (*usually paid by the seller).
Specific Business tax – 3.3% of the appraised value or registered sale price of the property (whichever is higher). This applies to both individuals and companies if the seller was holding the property for less than 5 years. (*usually paid by the seller).
Stamp Duty – 0.5% of the registered value of the property. Only payable if exempt from specific business tax if the seller was holding the property for more than 5 years. (*usually paid by the seller).
*The above split-up about which taxes are to be paid by the buyer or the seller are nominal and to be used as a guide only. It all depends on the agreed deal between the buyer and the seller.
Table 1: PROPERTY OWNERSHIP (HOLDING) PERIOD – INCOME TAX % DEDUCTIBLE
1 year – 92% deductible
2 years – 84%
3 years – 77%
4 years – 71%
5 years – 65%
6 years – 60%
7 years – 55%
8 or more years – 50%
Table 2 (2018): INCOME BRACKETS – PROGRESSIVE INCOME TAX RATES
1 to 150,000 = exempt
150,001 to 300,000 = 5%
301,000 to 500,00 = 10%
501,000 to 750,000 = 15%
751,000 to 1,000,000 = 20%
1,000,001 to 2,000,000 = 25%
2,000,001 to 5,000,000 = 30%
5,000,001 or more = 35%
Calculating the withholding tax is complicated but here is an example case (below) for those who want to try.
Example of how to calculate the total taxes and fees:
Example: Suppose that the government appraised value is 100,000 Baht per square meter or 400,000 Baht per Talang Wah for the property.
– The total area of the property is 100 sqm or 25 Talang Wah.
– The total government appraised value is 10,000,000 (100,000 x 100) Baht
– Registered selling price is 12,500,000 Baht
– The Seller owned or was holding this property for 3 years (see table above for the income tax % deductible)
Withholding Tax (*usually paid by the seller)
The government assessed price = 10,000,000 Baht (100,000 x 100)
Deduction with the expense of holding for 3 years for 77% = 7,700,000 (10,000,000 x 0.77)
Balance = 2,300,000 (10,000,000 – 7,700,000)
Balance divided by the 3 years of possession = 766,666.67 (2,300,000/3)
Income Taxation for 766,666.67 on the progression rate (refer to the table above for progressive income rates)
1 to 150,000 = exempt
150,001 to 300,000 = 5% (7,500)
300,001 to 766,666.67 = 10% (46,666.57)
Total = 54,166.57 (7,500 + 46,666.57)
Multiply by the years of possession = 162,499.70 (54166.57 x 3)
(A) In this case, the withholding tax is 162,499.70 Baht
Transfer Fee (*usually paid by the buyer)
2% of the government assessed price of 10,000,000 Baht = 200,000
(B) The transfer fee is 200,000 Baht
Stamp Duty (*usually paid by the seller if applicable)
In this case is exempt. This is because the transaction is subject to the Specific Business Tax (ownership of fewer than 5 years).
Specific Business Tax (*usually paid by the seller)
3.3% for Specific Business Tax based on the government assessed price or sale whichever is higher. In this case sale price is higher than government so 12,500,000 x 3.3% = 412,500.
(C) Specific business tax is 412,500 Baht
TOTAL EXPENSES ARE: 774,999.70 BAHT (A+B+C)
Happy property transfer day…from the Home2go team 🙂
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