Thailand Property - Taxes & Costs
Taxes and costs
For foreign purchasers, Thailand has an attractive taxation system. Expats who live in Thailand for more than half the year are tax residents. But if they do not remit their earnings in the same calendar year, they are excluded from Thai tax. In any case, double taxation treaties protect expats from paying taxes twice.
Paying property taxes is complicated by the fact that no set rules apply on who pays which taxes. But Company Vauban can help buyers negotiate the best deal. To avoid unwelcome surprises, it is crucial the purchase agreement specifies who pays what.
The main taxes on Thailand property are:
1.Income Tax or Withholding Tax
This fee - generally from 1% to 3% on the value of the property - is normally paid by the seller. It is calculated with a complex formula including the value of the property, how long it has been owned and personal tax rate.
2. Transfer fee
The Thailand Land Department charges 2% of the assessed value of all transfers of land and property. This fee is paid on the day of the transfer of ownership, normally by the buyer.
3. Stamp Duty
A duty of 0.5% is charged by the Thailand Land Department on value or purchase price, whichever is the higher. This tax is not charged if Specific Business Tax is applicable (see below) and is usually paid by the seller.
4. Specific Business Tax (SBT)
The seller will normally pay this 3.3% fee, which is levied on companies and on owners who have been in registered possession for less than five years.
5. The Land Tax
Currently an insignificant sum that is rarely collected - but see below in Tax News.
Buyers can expect to pay between 20,000 and 60,000 baht to complete their purchase. This covers three services: checking the title deed, drafting the contract, completing the transfer.