Taxes on Buying and Selling Condominiums in Thailand

 

 

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

Thailand-Property- Sales Taxes and Fees

*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)

Thailand-Condo Sales Taxes

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.


17 thoughts on “Taxes on Buying and Selling Condominiums in Thailand

  1. How does this work if a retired ex-pat has been here 16 years, but has not had a work permit
    since 2003 and receives stipend from home country retirement account?

    • Fresh Editorial says:

      Hi Linda, thank you for your comment. Please kindly note buying a condo in Thailand/ Bangkok is not dependent on a Thai Work Permit. You could buy a property locally, even without any source of income from Thailand.

  2. R Mahendran N Rajaratnam says:

    I’m a foreigner and own a freehold condominium in Krabi Thailand. I signed my S&P in 2011 and full payment was made in 2017 with the issuance of title deed and house registration book. For property tax calculations , does the number of years (ownership) commences from signing the S&P or at time of receipt title deed.

    Thank you

    • Fresh Editorial says:

      Hi R Mahendran N Rajaratnam, thank you very much for your question. Please note Sales Taxes are calculated from the date your name is published on the Title Deed (So on the day the property was transferred in your name).

      Hope this helps!

    • Fresh Editorial says:

      Hi Susan, you are correct the Tax System is slightly different from Companies.
      Please kindly, contact an Accounting/ Legal Firm for more precise information on this matter.

  3. Bengt Gothlin says:

    Hi! I pay 30% tax in marginal tax from my work income. Would I have to pay 30% WHT/Income tax on the assessible income if I sell a condo? Or is the assessible income from a real estate sale on a separate tax bracket calculation starting from 0 income?

    • Fresh Editorial says:

      Hi Bengt,

      Thank you for your question.
      Again please refer to the article the WHT/Income Tax has nothing to do with personal income. There is an example calculation in the article.

      Thanks,
      Pierre

    • Fresh Editorial says:

      Hi Sergio,

      No there are no annual/monthly govt. taxes until you sell/transfer the condo.

      Thanks,
      Fresh Property Editorial.

  4. Hi! We live in a condo which is still under mortgage and the name of the financial institution is published on the Title Deed. Basically, our Years of Ownership is 0. How does this work with regards to Specific Business Tax and Withhold Tax (WHT)/ Income Tax if we were to sell this condo prior to transfer of ownership at the end of the loan?

    • Fresh Editorial says:

      Hi Nikolaas, normally even if a financial institution is involved your name should appear on the Chanote; so both the Loan Provider and yourself should appear on the title deed. In these circumstances the normal Government Taxes and Fees discussed in this article are still valid.

      However, if you need more specific advice we would kindly advise you to seek help from an accountant and/or law firm.
      Thank you again for commenting.

      Regards,
      Fresh Property Editorial

  5. Hi.. If I have signed the Purchase agreement in 2017 Oct, and with a deferred payment clause till 2021.. and I decide to sell the condo in 2019 (still 2 years left for registration & title transfer)..do I have to pay SBT ?

    Also can I ask developer to transfer the condo to new buyer and proceed to transfer title to him on payment of full proceeds?

    • Fresh Editorial says:

      Hi Surajit,

      If we understand your situation correctly you have currently bought an off-plan unit.
      Therefore at this stage, the purchase agreement is between you and the developer (There is no Title Deed as the Project is not yet completed)

      In that case, yes Transferring your purchase rights on the unit to another buyer is possible without paying SBT.
      However, please ensure that the Developer/ Sales and Purchase Agreement does not have any ownership transfer penalties.

      Hope this helps.

      Regards,
      Fresh Property Team

  6. In calculating the Withholding tax on Condo, how is the appraised value determined? Does it equal the fair market value? Thanks.

    • Fresh Editorial says:

      Hi Anthony,

      Thank you for your comment.

      The appraised value is set by the Government.
      The values of Condos in Bangkok are publicly available and can be confirmed on: http://property.treasury.go.th/pvmwebsite/
      (The website is in Thai)

      As a rule of thumb, Appraisal Value is lower than actual selling price.
      Hope this helps.

      Thanks,
      Fresh Property Editorial

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Fresh Editorial

The Editorial Team is made up of Property Professionals with years of experience in the Bangkok Property Industry. Articles and reports are drafted using first-hand experience and local expertise!

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