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Taxes on acquisition, possession and sale of real estate in Thailand.

19-04-2010

 

Taxes when buying property in Thailand.

1. Buy apartment in a condominium

When buying an apartment in Thailand paid the following taxes: 

1.Tax for the transfer of ownership; 

2.Gerb collection or entrepreneurial tax; 

fee to transfer ownership or «Transfer Fee» paid at a rate of 2% of the established Land Department assessed value PROPERTY. The estimated value is calculated according to special formulas in the Land Department, and usually differs from the contract value of the property, but not necessarily a big way.   

stamp duty or «Stamp duty» is 0,5% of most of the value of the property - a contract or established by the Land Department assessed value. Payable if this property is owned by the last owner of over 5 years. 

Alternatively, the business tax (Special business tax) is levied at 3.3% of most of the value of the property - a contract or established by the Land Department assessed value. This tax must be paid if the property is resold within the previous 5 years.  Thus, some of 2 types of tax - stamp duty or Business Tax - is paid depends on how many years a property is owned by the seller. 

Typically, payment for these taxes is split between the seller and the buyer in equal shares. 

How sredneraschetnuyu, we can take this formula: additional costs for buyers of real estate = approximately 2% of the cost of housing. 

2. Buy property through the acquisition of Thai companies

In the case of buying an apartment you have 2 options: the purchase of housing in its name or registration Thai company (or the acquisition of an existing) and purchase of apartments on the company. Both options are possible and the choice depends on you. If you buy a house or a villa, you, under the laws of Thailand, have no right to acquire such housing as personal property, if you are not a citizen of Thailand. In this case, you acquire a company that owns a house or a villa. Specifically, you get shares in the company that owns the real estate. When purchasing shares of the company obligations to pay taxes on the transaction of sale of real estate does not arise, since a change of owner of real estate as such does not occur. However, the buyer should conduct an audit of the company, check its purity and the rights of property ownership. When buying a company (ie shares), you get not only her rights but also obligations, including tax. At the request of the buyer may be a detailed audit of the company purchased. The cost of such audit is about 40 000 - 70 000 Baht. 

When purchasing shares of the company that owns the property, must also pay a fee for re-registration of shareholders and directors of the company - approximately 20 000 baht. The ownership of the Thai company, other than property taxes will need to pay corporate taxes (social security tax, income tax, etc.), as well as the costs of the Company. The costs depend on the number of employees, designed in the company, the number of work permits and many other factors. 

a much easier option - to register a new Thai company. The cost of such services - about 30.000 baht. In this case you get a clean company, to which, and renew a house or villa.

Current taxes property owners in Thailand. Commercial use of real estate

in Thailand there is no property tax, in contrast to most other countries. There are only a few taxes levied on property: land tax, local development tax and tax on the use of buildings. These taxes are levied only with the owners of houses, buildings and land, which use their property for commercial purposes - for example for rent. 

land tax is very low and amounts to just a few baht with 1 paradise land (1 rai = 1 600 m2). Due to the fact that he is very low, to pay this tax can be once every few years when its value is accumulated to a considerable sum. The general rule in transactions in Thailand is the neglect of the value of this tax. 

If the land owner does not use it for commercial purposes, he is obliged to pay local tax on development. The rate of this tax is also very low. Data are not taxed land under private dwellings, but this exception applies not to all plots. If land acquisition is necessary to clarify this issue at the Land Department.  The tax on the use of buildings. Its rate is 12,5% of the contract or the estimated annual amount of revenue from the lease. Usually used in the calculation of the tax amount specified in the lease contract. But the Tax Department may, at its discretion, establish a different payment amount based on market prices, if it considers the amount of lease payments under the contract understated. 

lease agreement concluded for a period exceeding 3 years, should be compulsorily registered in the Land Department. In its registration will need to pay a one-time fee of 1,1% of the contract. The tax on the use of buildings usually pays the landlord - however, and here everything is determined by prior agreement of the parties.

Taxes when selling real estate in Thailand

amount of tax charged to the seller or «Withholding tax», depends on who is the seller of real estate - the company or individual. 

When selling property to private entity, income derived by the seller, is taxable. This tax is calculated on a complex formula that takes into account the estimated value of the property, the length of time during which the seller owned the real estate, the amount at which property was acquired and individual income tax rate for that person.  According to the Tax Code of the Kingdom of Thailand, the tax on profits of an individual shall be calculated based on the following progressive scale: 

Annual Income (Baht) and the interest rate of tax:

0 - 150 000 - 0% 

151 000 - 500 000 - 10% 

501 000 - 1 000 000 - 20% 

1 000 001 - 4 000 000 - 30% 

4 000 001 and above - 37% 

Ie calculation is performed based on the total annual income in Thailand, not only from income derived from the sale of specific property (this applies to those who receive and other income in the country, such as salaries). 

When selling real estate company, is charged as income tax and profits tax. 

Income tax for legal entities is 1% of most of the value of the property - a contract or established by the Land Department assessed value. This tax is essentially a down payment of income tax. At year-end tax department will be recalculated for the tax business, which paid an advance tax will be taken into account. 

Same rate of profit tax for companies with authorized capital of more than 3 000 000 baht is 30%. Companies with charter capital of less than 3 000 000 baht, according to the Tax Code, are required to pay income tax according to a progressive scale below: 

Profit (Bath) and the interest rate of tax:

1 000 000 - 10% 

1 000 000 - 3 000 000 - 25% 

more than 3 000 000 - 30% 

It should be noted that the company created to own property (eg if you buy a villa in Pattaya), usually have a share capital of about 1 000 000 - 2 000 000 Baht. And if the sale of property will be carried out not by selling shares of the company - owner nedvizhiosti, you will need to pay income taxes in accordance with the table above.

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