|"Beyond the price":
Some indications on various expenses involved when purchasing
real estate in Thailand.
It is often not so obvious and agreeable between buyer and seller who
is supposed to shoulder which type of expenses that typically incur during
the acquisition of real estate and its registration with the land department.
Buyer, Seller and Agent (if applicable) should clarify this at an early
stage instead of making silent assumptions that later on have to be corrected
to the disappointment of the one or the other or all sides.
PURCHASE/SALE OF LAND
The following fees apply:
Transfer fee* = 2% on the official land appraisal price from
the land department;
(The official appraisal is the minimum base of calculation for the
transfer fee. If the declared actual selling price is higher, the 2% will
be levied on that higher value.)
3.3% business tax on the actual selling price;
0.5% stamp fee.
Note regarding the business tax:
A legal entity is always required to pay 3.3%, independent from any
An individual owner/seller will be assessed at the land department
and the holding period goes into the formula (where less than 10 years
of ownership will draw a higher business tax).
PURCHASE/SALE OF A CONDOMINIUM
Currently,* the transfer fee = 0.01% of the land department
*The transfer fee has been temporarily reduced. We hear that
increases are expected to be implemented "soon" (probably early in 2000).
3.3% business tax (if less than 5 years owned and not occupied by owner).
Not an initial fee but possibly later quite relevant: A condominium
maintenance fee can range for instance from 2,000.- to 8,000.- Baht/month.
This could be a relevant factor especially in the case where the unit is
bought as an investment and rental property.
Corporate income tax is 30% on net income. In some cases companies
had been formed just to create a legal entity ownership over a particular
real estate. If the buyer agrees to purchase the company together with
that particular asset the direct ownership of the real estate does not
change and there will be no taxable income. The object of sale will be
the company shares and only the personal income situation of the seller
will be taxable.
Disclaimer: Although the information in this article
has been obtained from sources believed to be reliable, we do not guarantee
its accuracy and such information may be incomplete or condensed and is
subject to changes from time to time. (Status: December 1999)