Taxes when buying property
Tax on the purchase of real estate in Thailand is paid upon registration of the transaction in the Land Department. Moreover, the amount will depend on the method of registration of real estate - Freehold or Leasehold.
The full tax rate when registering real estate as a property (Freehold) is 6.8%. This tax is compound. Below are all the fees included in this tax when buying a property on the primary market from a developer:
- Transfer Fee - a mandatory fee paid for the services of registering the transfer of ownership of real estate in the Land Department. The fee is 2%.
- Special Business Tax (SBT) - An indirect tax imposed on a number of VAT-exempt activities, including the sale of real estate. 3.3% - paid by the developer.
- Duty Stamp - The tax established on tools - drawing up legal documents when registering a transaction. 0.5% - paid by the developer.
- Withholding Tax - Income tax (income of an individual) withheld by the payer under the transaction. 1% - paid by the developer.
If the transaction takes place on the secondary market, then the parties agree on payment of 6.3% under the contract of sale. By the way, if the owner has owned the property for more than 5 years, then a special tax of 3.3% is not paid.
The tax on the purchase of real estate registered in Leasehold is 1.1%:
- Transfer Fee - a mandatory fee paid for the services of registering the transfer of ownership of real estate in the Land Department. The fee is 1%.
- Duty Stamp - The tax established on tools - drawing up legal documents when registering a transaction. The fee is 0.1%.
Property ownership 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.
If the property is rented out on a monthly basis, then the tax on it is calculated at a rate of 0.02% as for residential property.
If the property is rented out on a daily basis, then it is considered commercial and the tax rate is applied as for commercial real estate from 0.3%.
