Temporary Property Transfer Tax Fee Reduction
Thailand Real Estate Taxes
In order to boost commercial sale of real estate in Thailand the Thai government issued a temporary reduction on specific business tax from 3.3% to 0.11% on commercial or profitable sale of immovable property. The incentive will start arch 2008 and end March 28 2010. Also the reduced transfer fee for specified real estate properties in the same period from 2% to 0.01% will end 28 March 2010. The current rate reductions have not been extended by the government and will go back to the previous levels of before March 28 2008 (continue standard fees and taxes).
Transfer fees
The transfer of real property after March 28 2010 is again subject to a transfer fee of 2% on the government assessed value of the property. There will be stamp duty at 0.5% when the real property is transferred, except in cases where the seller is subject to a specific business tax. Specific business tax will again be charged at the previous rate of 3%, plus a municipal tax of 10% bringing this tax to 3.3%. The transfer of real property is (among others) not be subject to the specific business tax if the seller is an individual and has possessed the property more than five years before the transfer. The transfer is also exempt from specific business tax if the real estate is transferred by inheritance.
Specific Business Tax
In addition to transfer fee, specific business tax and stamp duty, withholding tax is charged when transferring real estate property over the registered sale price or appraised value whichever is higher. Withholding tax for companies remains at 1% over the actual sale price or government appraised value. For individuals withholding tax is charged at a progressive rate with some specific deductions and exemptions and depending on the number of years of possession. Reduction of withholding tax was not part of the governments program to stimulate the economy and will not change after March 2010.
The tax calculation in case of the transfer of a condominium by a private owner with 3 years ownership and a value of 5 million baht is as follows:
Transfer before March 29 2010 (under the temporary rate reduction):
- Transfer fee 0.01% over 5,000,000 THB = 500 THB
- Specific Business Tax & Local Tax 0.11% = 5,500 THB
- Individual Withholding Tax approx 100,000 THB
- Application fee and others approx 300 THB
Total: 106,300 THB
Transfer of a condominium (value of 5 million) under the normal rates:
- Transfer fee 2% over 5,000,000 THB = 100,000 THB
- Specific Business Tax & Local Tax 3.3% = 165,000 THB
- Individual Withholding Tax approx 100,000 THB
- Application fee and others approx. 300 THB
Total: 365,300 THB
This is a sample calculation! the actual calculation by the Thailand Land Department could be different based on appraised and actual sales price
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