Well if you don’t know by now the property tax reduction has come to and end. There was much talk about extending it to beyond the global crisis but the Thai government had been taking a tax beating with the loss of all the money in order to keep the Thai property market stable. Here are the taxes now payable and explained briefly as the the breakdown and who pays what.
The first property transfer tax payable is the transfer taxes. This is normally 2% of the appraised value or municipal value or the property being sold. The buyer normally pays this tax but many times the cost is shared between the buyer and the seller and comes down to negotiation.
The second property tax payable is the Business tax of 3.3% of the municipal value or the sale value whichever is the highest. This tax is based on 3% business tax and 10% of the specific business taxes being 0.3% hence 3.3% business taxes payable. The seller normally pays this tax on the transfer of the property.
There is also a Stamp Duty payable on the transfer of the property. This is 0.5% of the registered value of the property. If the business tax is payable then the stamp duty will be ignored in the transaction. The Stamp Duty is normally paid by the seller of the property as well. You don’t normally pay both only one. Speak to a property lawyer in Krabi about this.
There is also a withholding tax on the transaction. This is always payable by the seller. If it is a business selling the property then the charge is 1% of the municipal or sale value whichever is the greater. If it is an individual then the tax is on a progressive scale. Speak to the lawyer transferring the property about this before you sign the agreement.
Stamp duty is not payable of the following property transactions:
- You have held the property for more than 5 years;
- You are transferring it to the government;
- You are transferring it to a temple, church or mosque;
- You are transferring it to an heir (child but not adopted children)
Check with your attorney about any other issues that you are not certain about. As stated the property tax discounts which was offered has come to and end sometime ago and it is back to normal. If you have any questions about buying property in Thailand then speak to us online or see our main website for more details.