Sales and purchase taxes are always primary considerations especially when investing in real estate. Certain countries worldwide, impose tough taxation rules that can quickly erode capital gains and result in sub-standard profits for investors!

Interestingly, Thailand offers buyers and sellers an advantageous and a relatively low set of taxes. As a general rule of thumb:

“Sellers will typically disburse Taxes worth approximately 5-7% of the Condo’s Sales Price”

In comparison to some developed countries especially in Europe (I.e. UK, France, etc…), Thailand’s tax system remain extremely attractive.

Buying and Selling Condos Taxes in Thailand

*Withholding Tax: Is a complicated Tax Calculation based on the Seller’s Marginal Tax Rate. Please refer to the example calculation below for explanations.

1. Transfer Fees

This is equivalent to 2% of the official government “appraised value” of the property; the fees are paid directly to the Thai Land Department in order to transfer ownership of the condo. Transfer Fees are typically shared equally between the Buyer and Seller (I.e. 1% by each party).

2. Specific Business Tax (SBT)

Specific Business Tax is payable by both companies and private individuals who have owned the condo for less than 5 Years. The Tax is calculated at 3.3% of the government appraised value or agreed sales price, whichever is higher.

It is important to note that if the Seller has owned the Condo for less than 5 Years, they can still have Specific Business Tax exemption. However, this is provided they have registered their principal place of residence in the household registration certificate of that Condo for a period of 1 year.

3. Stamp Duty

Stamp Duty is only due, when SBT is not applicable. The fee is equivalent to 0.5% of the appraised value or agreed sales price, whichever is higher.

4. Withhold Tax (WHT)/ Income Tax

WHT/Income Tax has a misleading name, it is important to note that the calculation of this Tax has nothing to do with income earned on the Condo. It is actually a slightly complicated calculation, based on an individual’s marginal tax rate. Several factors such as property appraisal value, ownership period and deductions based on depreciation is taken into account.

The different variable used in the calculation of WHT/Income Tax, means it is a particularly difficult Tax to illustrate. However as briefly mentioned at the start, property sellers generally can expect to disburse no more than 5-7% of the value of the Condo in Sales Taxes.

Real Condo Sale Example

Condo Name: Tree Condo Ekamai (2 Bed/ 85 Sqm.)
Agreed Sales Price: 9,000,000 THB
Years of Ownership: 3
Official Appraised Value: 6,665,755.50 THB*

*This Appraised Value is obtained from the Government Land Office.

1. Transfer Fee

– 2% of the official government Appraised Value.

Calculation:
2% of 6,665,755.50 THB= 133,315.11 THB

133,315.11 THB/ 2

Buyer to Pay: 66,657.55 THB
Seller to Pay: 66, 657.55 THB

2. Specific Business Tax

– Seller owned condo for less than 5 Years (Did not register name on Household Registration Book)
– 3.3% of the government appraised value or agreed sales price, whichever is higher.

Calculation:
3.3% of 9,000,000 THB
Seller to Pay: 297,000 THB

3. Withhold Tax (WHT)/ Income Tax

– Appraised Value of Condo: 6,665,755.50 THB
– Years of Ownership: 3 (77% Standard Deduction of Expenses)

Calculation:
Part 1.
6,665,755.50 THB – (77% of 6,665,755.50 THB) = 1,533,123.80 THB
1,533,123.80/ 3 Years= 511,041.30 THB Yearly Assessable Income

Part 2.
Yearly assessable income is 511,041.30 THB
– The First: 300,000 x 5%= 15,000 THB
– The Second: 200,000 THB x 10%= 20,000 THB
– The Remaining Amount: 11,041.30 THB x 15%= 1,656.20 THB

Assessable Personal Income Tax Per Year (15,000 + 20,000 + 1,656.20 THB) = 36,656.20 THB.

Seller acquired this property for 3 years so income tax per year: 36,656.20 THB x 3 = 109,969 THB
Seller to Pay: 109,969 THB

Recap of Taxes Payable (By Seller/Buyer)

Transfer Fee
Buyer to Pay: 66,657.55 THB
Seller to Pay: 66, 657.55 THB

Specific Business Tax
Seller to Pay: 297,000 THB

Withhold Tax (WHT)/ Income Tax
Seller to Pay: 109,969 THB

On a final note, the Seller of the property will also have to consider the Property Agency Commission Fees; more information can be found at: Property Agency Commission Rates in Bangkok.

*Disclaimer: Information contained within this article is for informational purposes and is not intended to substitute obtaining Accounting, Tax and Financial Advice from a Professional Accountant.