Understanding the tax implications of property transactions in Thailand is crucial for both buyers and sellers. The Thai property tax system includes several key components that affect the total cost of real estate purchases.
Main Property Transaction Taxes
Transfer Fee
A 2% fee applies to the registered value of the property, typically shared equally between buyer and seller.
Business Tax
A 3.3% tax applies to the higher value between the appraised value and registered sale price.
Withholding Tax
For company sellers, this amounts to 1% of the higher value between the appraised or registered sale value. Individual sellers face progressive rates based on various factors.
Special Considerations
Stamp Duty
A 0.5% fee applies to the registered value, but only when the transaction is exempt from business tax.
Total Cost Impact
The combined tax burden typically ranges between 5-7% of the selling price.
Recent Development
Thai nationals purchasing homes valued up to 7 million baht in 2024 benefit from a reduced registration fee of 0.01%, down from the standard rate.
Leasehold Property Taxes
Lease Registration
- Registration fee: 1% of total rental payments
- Stamp duty: 0.1% of lease value
Important Considerations
Documentation Requirements
Foreign buyers must provide proof of foreign remittance through Foreign Exchange Transfer Forms for transfers exceeding $20,000 USD.
Payment Structure
While legally the seller should pay taxes and stamp duty with transfer fees split equally, common practice often sees all fees split 50-50 between parties.
Tax Calculation Basis
The tax assessment uses either:
- The registered sale value
- The appraised property value
- Whichever amount is higher
This comprehensive tax structure ensures proper regulation of Thailand’s real estate market while maintaining transparency in property transactions.
