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Thailand Property Taxes

Whether you are buying or selling property in Thailand, understanding the taxes and fees involved is essential when transferring or receiving ownership. Purchasing property in Thailand is a major financial commitment, and the associated taxes can significantly affect the overall cost.

However, property taxes in Thailand are partly negotiable between buyer and seller. Each party is responsible for different taxes, meaning the total cost can vary with each transaction. Understanding the tax rules regarding real estate and land in Thailand will help you avoid disputes or unnecessary expenses in taxes and fees.

In the following sections, we will explain the different types of property taxes, clarify which are paid by the buyer or seller, and highlight the risks of proceeding without professional guidance.

Thailand Property Tax Overview

There are numerous taxes associated with property purchases that must be paid before the transaction is finalized. However, what taxes you’re liable for depend on whether you are the buyer or seller of the property or building. Here is an overview of the property taxes in Thailand and who is responsible for each:

Transfer Fee

Also known as the land registration fee, a transfer fee is payable at the Thai Land Department during the title transfer. This tax is levied at 2% of the registered value of the property being transferred. The buyer is usually liable for this fee. However, the land registration fee can be split 50/50 with the seller if both parties agree and record it in the Sale and Purchase Agreement.

Stamp Duty

Stamp duty is imposed on official documents submitted during the property transfer process. This tax is valued at 0.5% of the registered value of the property you’re looking to purchase. If you have to pay specific business tax, you won’t be required to pay stamp duties.

Withholding Tax

In Thailand, withholding tax is weighted at 1% of the appraised value or registered sale value of the property, depending on which option is higher and whether the seller is a company. If the property seller is an individual, this amount is calculated at a progressive rate based on the property’s appraised value.

Business Tax

Also known as a specific business tax, this is levied at 3.3% of the appraised value or registered sale value of the property, whichever one is higher. This is only payable if the property is sold within its first 5 years of ownership.

Risks Associated with Thai Property Taxes

Calculating the fees and taxes for property or land is best done with professional legal support, as doing it alone increases the likelihood of errors. Without legal guidance, trying to fulfill these obligations makes you vulnerable to dishonest sellers and legal issues.

For instance, the property seller or developer can mislead you into signing a contract where most of the tax burden falls onto you. Once signed, the agreement is legally binding, and you may be held liable for excessive tax payments. This is why reviewing the Sales and Purchase Agreement (SPA) is essential. A qualified real estate lawyer can identify unfair terms before you sign.

There are also penalties associated with paying property taxes late and in the wrong amounts. Inaccurate and late filings can lead to various problems, such as significant fines, surcharges, and potential legal consequences. Under Thai law, lack of awareness is not a valid defense, and you can lose more of your finances or find yourself imprisoned.

Property Taxes in Thailand FAQ

Do Land Owners Pay Yearly Property Taxes in Thailand?

Yes, all land or building owners are responsible for paying taxes in Thailand on an annual basis. However, there is an exception to the rule if the landowner is listed as the head of the household in the property’s blue house registration booklet.

Do I Need to Pay House and Land Taxes?

You will be liable to pay house and land taxes in Thailand if you are earning rental income through your property. This tax is levied at 12.5% of the yearly rental value of your property.

Who is Responsible for Property Taxes in Thailand?

Both buyers and sellers are liable for property taxes, but which ones they have to pay depends on the tax type. If you’re the buyer, you generally only have to pay half of the transfer fee, unless the property contract states otherwise. On the other hand, the seller is usually responsible for the stamp duty, specific business tax, withholding tax, and the other half of the transfer fee.

Professional Assistance from a Thai Property Tax Consultant

Understanding property taxes and how to pay can be a challenge, but it doesn’t have to be difficult. For professional support in handling property taxes in Thailand, reach out to Siam Ä¢¹½ÊÓƵ’s property team. We are a full-service law firm with over 20 years of experience in helping foreigners securely sell and purchase real estate or land in Thailand.

Our lawyers have the expertise to manage your property tax obligations on your behalf, so you can focus on more pressing matters with your new property. We will also review the contract before you sign it to protect you from fraud and overpaying.

Contact Siam Ä¢¹½ÊÓƵ and book a consultation with our lawyers today to purchase property with confidence and in full compliance with Thai law.