Taxes & Fees for Foreigners Buying or Selling Property in Thailand

Taxes & Fees When Buying or Selling Property in Thailand (For Foreigners)

When a foreigner is involved in a property transaction in Thailandspecifically the transfer of condominium ownership (or other legally permissible real estate)several taxes and fees must be settled at the Land Department. Both the buyer and the seller typically share these burdens, which include the following compulsory payments:

1. Transfer Fee 

• Rate: This is calculated at 2% of the official appraised value set by the Treasury Department or the actual transaction price, whichever is higher.
• Responsibility: It is common practice for the buyer and seller to split this fee equally (1% each), though this must be specified in the sales contract.
• Special Note: Buyers should check for any current government stimulus measures, as the Transfer Fee is often temporarily reduced to 0.01% for specific property values and types.

2. Specific Business Tax (SBT) 

• Rate: This tax is charged at 3.3% (including the local tax component) of the appraised value or the actual sales price, whichever is higher.
• Condition: The SBT is exclusively borne by the seller and is applicable only if the seller has held ownership of the property for less than five years from the date of acquisition.

3. Stamp Duty

• Rate: Calculated at 0.5% of the appraised value or the actual sales price, whichever is higher.
• Condition: The Stamp Duty is paid by the seller only if they are exempt from paying the Specific Business Tax (SBT). Essentially, a single transaction will be subject to either the 3.3% SBT or the 0.5% Stamp Duty, but never both.

4. Withholding Tax (WHT)

This mandatory tax is the sellers responsibility and is withheld by the Land Department official at the time of transfer. The calculation method varies significantly based on the seller's legal status:

• Individual Seller:
  • The tax base is the official appraised value. The calculation is complex: the value is first reduced by a statutory deduction based on the number of years the property was held, and the remaining amount is then subject to a progressive income tax rate (up to 35%).
  • The amount paid can often be claimed as a tax credit when filing the sellers annual personal income tax return.
• Corporate Seller:
  • The tax is calculated at a fixed rate of 1% of the sales price or the appraised value, whichever is higher.

Conclusion and Recommendation
Given the layered nature of Thai property taxes and the complexity of the Withholding Tax calculation, particularly for individual sellers:

It is strongly advised that foreign buyers and sellers seek consultation from a qualified property lawyer prior to signing the sales contract. Ensure the contract clearly specifies how all compulsory fees and taxes are to be allocated between the parties, and verify the final figures with the Land Department official to avoid any unexpected costs on the day of transfer.