Property Taxes and Fees when Selling a Condo in Thailand?

... Taxes, being a significant factor in the overall cost of property ownership, deserve careful attention as they directly impact profits and the attractiveness of property investment.

Thailand, known for its diverse economy encompassing high-quality agricultural produce, a thriving manufacturing and export sector, and its status as a global leisure and travel destination, has solidified itself as a formidable economic force in Southeast Asia. These favorable economic conditions have paved the way for investment and business opportunities across the country, with Thailand’s real estate market emerging as a prominent beneficiary of this positive economic activity. 

Interestingly, Thailand offers one of the most comprehensive sets of property ownership laws for foreigners in Southeast Asia. While restrictions on owning landed properties such as villas and houses still exist, foreigners can directly acquire, control, and own condominiums. These straightforward real estate ownership laws have made it exceptionally convenient for non-Thais to invest in and own homes or rental properties.

One pivotal aspect that potential investors and homeowners need to consider when venturing into Thailand’s real estate market is the realm of taxes and fees associated with owning and selling property. Taxes, being a significant factor in the overall cost of property ownership, deserve careful attention as they directly impact profits and the attractiveness of property investment. This article delves into the realm of condo-related property taxes in Thailand.

Real Estate Taxes on Condo Ownership

Land and Building Tax

Effective since January 1, 2020, the Land and Building Tax Act of 2562 B.E. applies to individuals and entities that own land, buildings, or condominiums in Thailand. This tax is paid annually to local administrative authorities and is calculated based on the assessed value of the property, determined by the Treasury Department according to the Land Code. The tax rate is subject to a fixed maximum rate, as follows:

  • Residential Property: 0.3%

However, it’s important to note that the current taxes on the appraised value of a condo vary based on the property’s value:

  • THB 1 million to THB 50 million: 0.02%
  • THB 51 million to THB 75 million: 0.03%
  • THB 76 million to THB 100 million: 0.05%
  • More than THB 100 million: 0.1%

This tax is typically collected annually by local authorities through a tax bill, which can be paid conveniently via QR code or bank transfer. In cases where a tax bill is not received, property owners can settle their taxes by visiting the local district office. 

Generally, the land and building tax amount is a negligible sum, often less than 1,000 THB for a condo valued at approximately 5 million baht. As a result, many landlords opt to pay this tax as a lump sum when selling the property. It’s worth noting that clearing any outstanding Land and Building Tax is a prerequisite for a successful property sale.

Taxes on Reselling a Condo in Thailand

When selling a condo, whether it’s a building, land, or house in Thailand, sellers are required to pay various taxes and fees, including:

1. Transfer Fees

These fees are associated with the transfer of ownership to the buyer and amount to 2% of the appraised value of the property. Typically, the transfer fee is evenly divided between the seller (1%) and the buyer (1%).

2. Business Tax

Business Tax is set at 3.3% of either the selling price or the appraised value, whichever is higher. Sellers who have owned the property for more than 5 years or have their names registered on the household registration book for over 1 year are exempt from this tax.

3. Stamp Duty

If the seller is exempt from paying Business Tax, Stamp Duty applies, amounting to 0.5% of either the selling price or the appraised value, whichever is higher.

4. Income Withholding Tax (WHT)

Despite its name, Income Withholding Tax is not related to rental income generated from the property. For companies, the tax rate is 1% of the appraised value or selling price of the property, whichever is higher. Individual sellers are subject to a progressive tax rate based on the appraised value of the property, with deductions based on the number of years of ownership.

Determining the exact amount of Income Withholding Tax involves a complex calculation that includes the seller’s net yearly assessable income, annual personal income tax due, and deductions for the period of ownership.

Responsibility for Sales Taxes and Fees

As a customary practice, sellers are responsible for paying the sales taxes, notably Business Tax and/or Stamp Duty, as well as Income Withholding Tax. 

Transfer fees are usually shared equally between the buyer and the seller. However, negotiations between the parties can influence the allocation of these costs.

Sales Taxes and Fees Calculator

Fortunately, several tax calculators can assist potential sellers in estimating the taxes and fees associated with reselling real estate in Thailand. To use these calculators, sellers need to provide specific inputs, including:

  • Selling Price
  • Years of Condo Ownership (As per title deed)
  • Appraised Value

The most accurate online calculator for confirming the government appraised value and rechecking Transfer Fees, Business Tax/Stamp Duty, and Income Withholding Tax is available on the Thai Treasury Department’s website. While the calculator is in Thai, it can be navigated with assistance from a Thai speaker.

Department of Thai Treasury Department Calculator

Assessing Real Estate Taxes and Fees

As a rule of thumb, taxes and fees associated with reselling a condo in Thailand typically amount to approximately 7-8% of the selling price. However, this is a rough estimate, and sellers seeking precise calculations should review the applicable tax rates.

Upon thorough evaluation, it becomes evident that Thailand’s real estate tax rates remain attractively competitive, especially when compared to countries imposing substantial taxes on ownership and sale of multiple properties. Thailand stands as a tax-friendly destination for both homebuyers and investors alike.

In conclusion, Thailand’s welcoming foreign property ownership laws, coupled with relatively modest property-related taxes and fees, make it a compelling choice for individuals looking to invest in the country’s vibrant real estate market. As Thailand continues to thrive as a global economic hub, its real estate sector is poised to offer a secure and potentially profitable avenue for investment.

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