What taxes must a buyer pay when buying a property? In fact, the buyer must pay a registration fee, the amount of which depends on the type of property being purchased – an apartment or a villa and the form of ownership – leasehold or freehold.
In some cases, the fees are tied to the contract value of the object (value under the contract of sale), and in others to the estimated value. It can be found in the Land Department immediately before the transaction, but it is always lower than the contract.
When buying an apartment in full ownership (Freehold), the buyer pays only a fee for the transfer of ownership (Transfer Fee), which is 2% of the appraised value of the apartment.
When buying an apartment in long-term possession (Leasehold), the buyer pays a fee for registration of a lease agreement in the amount of 1% and a stamp duty (Stump Duty) in the amount of 0.1% of the contract value.
When buying a villa by a foreign individual, the building is registered in full ownership (Freehold), and the land in long-term ownership (Leasehold). In this case, the buyer will pay a transfer fee from the building, which is 2% of the appraised value of the house. And for the registration of a long-term lease agreement for land, it will be necessary to pay 1.1% of the contract value.
Tax on the sale of real estate.
In the event of a property sale, SBT (Specific Business Tax) or Stump Duty, depending on the length of time the property has been owned, must be paid, as well as income tax (Income Tax). If you have owned a property for less than 5 years, you will be required to pay a business tax (Specific Business Tax), which is 3.3% of the contract or appraised value, whichever was higher at the time of sale of the property. If you have owned the property for more than 5 years, you must pay Stump Duty of 0.5% of the contract value or the appraised value, whichever is greater.
Income Tax
At the time of registration of the purchase and sale transaction in the Land Department, it is necessary to pay the so-called income tax (Income Tax). The rate of this tax is calculated on the basis of a progressive scale:
Profit up to 300,000 Baht – 5% tax
300,001 – 500,000 Baht – 10% tax
500,001 – 750,000 Baht – 15% tax
750,001 – 1,000,000 Baht – 20% tax
1,000,001 – 2,000,001 Baht – tax 25%
2,000,001 – 4,000,000 Baht – 30% tax
from 4,000,001 Baht – tax 35%
For example, when buying an apartment of 35 sq.m for 3,000,000 Baht during the construction phase and reselling it a few years after construction is completed for 4,000,000 Baht, the profit will be 1,000,000 Baht. For the first 300,000 Baht the tax will be 15,000 Baht (5%), for the next 200,000 Baht the tax will be 20,000 Baht (10%), then for 250,000 Baht the tax will be 37,500 Baht (15%) and for the last 250,000 Baht – 50,000 Baht (20%). The total income tax is 122,500 Baht, which is only 12.25% of 1,000,000 Baht in absolute terms.
Property ownership tax
Since 2020, there has been a tax on property ownership in Thailand, which is 0.03% of the value, provided that the object is more expensive than 10,000,000 baht. That is, if your property is worth 10 million baht, then the property tax will be only 3,000 baht.