When buying property abroad, it is important to calculate all the costs that you may face both when buying and further ownership. Let's look at what, in addition to the cost of real estate, a buyer in Thailand pays.
Registration tax
The rate will depend on the form you choose: Freehold ownership - 6.8%, and if we are talking about buying from a developer, then no more than 2%, Leasehold (long-term lease) - 1.1%. This tax on the appraised value is paid to the Land Department upon change of ownership in the Chanot - certificate of ownership.
Depreciation fee
When registering real estate, a one-time fee for future repairs is paid. After the end of the guarantee for the building from the developer (5 years), the general meeting of tenants may decide to carry out a number of repairs or expand the infrastructure. In this case, the money is spent from the depreciation fund. The contribution is calculated according to the formula: the area of the apartment, multiplied by a fixed rate, and is paid to the management company. The average price for Phuket is 500 baht per sq.m.
Electricity and water meters
The first tenants pay for registration of meters. The average payment is from 20 to 25 thousand baht. This fee is a one-time fee and is paid to the relevant government departments (PEA and PWA).
Furniture package
This option can be included in the price of the apartment, or paid separately. Moreover, for apartments of different layouts (studio, apartment with 2 bedrooms), the cost of the surcharge will vary. Each developer sets the price independently. On average, in Phuket, a furniture package for a studio costs 200 thousand baht, for a two-room apartment 300 thousand baht. The furniture package includes movable furniture, household appliances, decor and necessary household items for life (spoons, forks, knives, pots, etc.). I draw your attention to the fact that in investment projects intended for rent, the purchase of a furniture package is obligatorily.
Freehold surcharge
In Phuket, it is common practice to make a payment for registration of real estate in Freehold ownership in a separate article, this is due to the fact that the number of apartments that can be registered to foreigners is limited to 49% of the square meters of the condominium. On average, the surcharge for the island will be 250 thousand baht.
Annual services
This is a fee for the upkeep and maintenance of the common areas of the property. Includes regular cleaning of the territory, maintenance of the landscape and gardens, collection and removal of garbage, all bills related to the common area, water and electricity costs, minor infrastructure repairs (painting, whitewashing, carpentry, etc.) , maintenance (elevators, general air conditioners, etc.), staff salaries. The infrastructure of the complexes is extremely diverse - swimming pools, gyms, saunas, playgrounds, and requires proper care. Payment is made to the management company at the rate of: the area of the apartment multiplied by a fixed rate and for 12 months. This payment is due in advance one year ahead. Payment for electricity and water is calculated according to the meters on a monthly basis.
Annual property tax
In 2020, an annual tax on property ownership was introduced. However, in the last 2 years, due to the pandemic, the rate of the new tax on land and buildings has been reduced by 90%. Below are standard rates without discounts.
The tax rate depends on the value of the property and its purpose. For real estate intended for one's own residence, the tax is charged in the amount of 0.02% to 0.1% (depending on the cadastral value of the property).
Real estate worth up to 10 million baht is not taxed, the name of the owner must be entered in the house book.
If the property is rented out, that is, used for commercial purposes, the tax rate will be from 0.3% to 0.7%.
If a company is the owner in Chanot, this property is considered for commercial purposes in any case.
It is worth mentioning the possible costs of owners who register real estate for a Thai company.
- Opening and registering a company in Thailand will cost about $1,000.
- Company service. Every year, the owner must submit the annual balance sheet to the tax authorities. This is done by the law firm in which you opened a company. The cost of services will be about $ 500 per year.
Property maintenance in Thailand does not involve much hassle, only two payments are made per year, for maintenance and property tax. At the same time, taking into account the income that your property can bring from renting out, these costs will not be noticeable.
