A comprehensive analysis of Thailand's real estate tax
Thailand Real Estate Tax
Thailand's real estate market has developed rapidly in recent years, especially in Bangkok and other famous tourist cities. The low investment threshold, superior supporting facilities and well living environment are the main reasons why many investors choose to buy houses in Thailand.
At the same time, the Thai government clearly stipulates that foreigners are not limited to buying houses in Thailand, there is no shared area, and there is no need to pay property tax (foreigners can buy 49% of the whole project, but not limited to the number of houses purchased), and the apartments are also equipped with free parking lots and complete public facilities. Does it mean that we can save a lot of money?
And because there is no "property tax" in Thailand, you only need to pay several transfer taxes (includes transfer fee, special business tax, stamp duty, personal income tax) when you transfer the ownership of real estate in Thailand. Let's take you to know about the real estate tax in Thailand.
Relevant taxes when buy or sell a property in Thailand
| Tax Category | Tax Rate | Seller Pays | Buyer Pays |
|---|---|---|---|
| Ownership Transfer Tax | 2% | 1% | 1% |
| Special Business Tax | 3.3% | 3.3% | 0% |
| Stamp Duty | 0.5% | 0.5% | 0% |
| Withholding Tax | 1% | 1% | 0% |
Ownership Transfer Tax
2% of the property price will be charged according to the land department of Thailand. According to the law, the seller and the buyer shall bear half of each.
Special Business Tax
If the house holder holds the house for less than 5 years, special business tax shall be paid when selling the house. When buying a new house, this tax will be borne by the developer. The tax shall be charged according to 3.3% of the real estate price according to the land department of Thailand. If you want to sell your home, you don't have to pay for it when you own it for more than five years.
Stamp Duty
0.5% of the property price will be charged according to the land department of Thailand. If developers already pay special business tax, then there is no need to pay stamp duty. In fact, there is no need to pay this fee when buying a house.
Personal Income Tax (withholding tax)
1% of the property price will be charged according to the land department of Thailand. The income tax is collected from the seller, and for buying a new house instead of second hand is of course borne by the developer. If you want to sell your house in the future, the income tax will be calculated according to the holding time of the house. The longer the holding time is, the less tax will be paid.
Inheritance Tax
There is no inheritance tax on the estate of inheritance in Thailand. It is freehold and can be inherited from generation to generation. There are only two cases of inheritance tax:
(1) For the descendants of the deceased, as long as the total value of the inheritance exceeds 100 million baht, a 5%-tax shall be levied on the net value of the inherited property;
(2) For the descendants who are not the deceased’s, as long as the total value of the heritage exceeds 100 million baht, a 10%-tax shall be levied on the net value of the inherited property;
(3) The spouse of the deceased is exempt from inheritance tax
It should be noted that the taxes of some properties should be paid according to the valuation of the real estate by the land department, and the higher one should be chosen to calculate on. For example, if the valuation of the real estate is higher than the sales price, the taxes should be paid based on the valuation of the real estate. We can simply divide the relevant taxes of the real estate transaction in Thailand into three stages, namely, the purchase period，the holding periodandthe sale period:
1. Purchase period: Transfer fee
2. Holding period: If it is rented, there will be a rental income and we need to pay personal income tax (details at below); if it is self-occupation, and we need to pay property maintenance fee and public sinking fund.
3. Selling period: Transfer fee, Special business tax and Stamp tax.
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