Written by Siam Expat Law

Standard tax rates for transferring real estate property (land, land and house, condominium)

In a standard sale and purchase or transfer of property (land, house, condominium) in Thailand there is no fixed rule for who pays the transfer fee, stamp duty or Specific Business Tax. It can vary from purchaser pays all to the seller pays all. This is part of the overall price negotiation and must be included in the sale and purchase agreement and should not be negotiated at the transfer and registration at the land office.

As a standard rule we recommend the following general formula for sharing the transfer fees and taxes:

* Specific Business Tax	the seller's duty
* Stamp duty	the seller's duty or shared
* Transfer fees	the buyer's duty or shared
* Withholding tax	the seller's duty

In case of an official housing or condominium development, by law, only up to 50% of the 2% transfer fees may be passed on to the buyer. Often the developer's contract for sale will state a different formula for sharing the transfer fees and taxes. Do not pay more than required by law. Have your sale and purchase agreement reviewed online by a legal professional and get detailed advice on the contract and compliance with Thai law for 4,800 THB ('ask a Thai Lawyer'). Save on lawyer fees, save on travel time.

Rates:

Transfer Fee	2% over the appraised value (1) of the property (Note tax reduction below)
Business Tax (2)	3.3% registered value * or appraised value (whichever is higher) note current tax rate reduction below
Stamp Duty	0.5% (3) over the registered value
Withholding Tax	1% registered value or appraised value (whichever is higher) (4)

⁽¹⁾ Appraised is an actual evaluation price of the land which calculated by the land office by reference to each area at which the land situated and some more criteria set out by the Land Department of Thailand (the appraised of a house by the Land Department depends on the floor area of the house, number of floors, materials used (e.g. wood or concrete) and location). Registered value is the actual sale price as declared at the Land Office when selling the property.
⁽²⁾ Specific Business tax shall be payable if the seller sells the property within five years of the purchase registration date. The transfer is not subject to business tax if the seller is an individual and has possessed the property for more than five years before the transfer. Companies with specific objectives/ business purposes are subject to Specific Business tax irrespective the period of ownership.
⁽³⁾ If the seller is subject to any Specific Business tax, the seller is exempt from the payment of the Stamp Duty. However, if the stamp duty has been paid to the Land Department, the seller shall have the right to claim for the refund in full within 6 months after the payment.
⁽⁴⁾ The Withholding tax of 1% is applicable if the seller if a company. Withholding Personal Income Tax depends if the immovable property is acquired by inheritance or gift or if the sale and purchase of the property has a trade or profit seeking purpose or not, usually the final Withholding Personal Income Tax income , as opposed to corporate withholding tax, shall be calculated at progressive rate with a deduction depending on the number of years of possession.

Temporary Thailand Property Tax reduction (2008/ 2009/ 2010)

In order to boost the real property sales business and the real property development business the Thai government has extended the tax breaks for property buyers for another year till March 28 2010. With the current additional extension the reduced transfer fee is extended till May 31 2010 .

The reduction of Specific Business Tax applies to all real estate transaction before March 28 2010 and has currently ended, the reduction of transfer fees (extended till May 31 2010 applies on specific real estate transaction (i.e. is not applied on private land transfers, in this case the 2% is calculated, but the reduced fee is applied on condominium transfers, transfers of land and house in housing developments, transfer of land and house up to a specific land area, commercial buildings, transfer of land under the land allocation act, and a few more specified properties) and end May 31 2010.

Related: Building and Land Tax