Property Purchase and Transfer
When you purchase real property, you pay because you want to possess the property you are buying. While there are several preliminary steps, the most essential step is the transfer of property from the owner or developer to you. Often the contract for the purchase of the property will specify how the property is to be transferred. The property transfer will generally take place at the land office where the ownership of the property will be registered upon the conclusion of the transaction.
If you buy property from a developer before development is completed, the transfer of property takes place upon the completion of your property. If the property had already been built, the transfer of property takes place once the installment payments have been completed in accordance to the signed contract. The remaining balance of the purchase price is usually paid on the day of transfer at the land office.
Taxes and Transfer Fees
In addition to the balance of the purchase price, you may also be liable to pay certain taxes and transfer fees.
Generally, the Buyer will be liable for the Transfer fee and the remaining types of taxes are borne by the Seller. However, it can always be negotiated between the parties of how the total amount of payable tax and duty is rationed among them.
- Transfer taxes - The land department levies 2% of the property value based on the value registered.
- Withholding tax - 1% of the appraised property value will be levied (explained below).
- Special business tax - Is only payable if the property is sold within its first 5 years of ownership and is levied at the rate of 3.3% of the appraised value.
- Stamp duty - A total of 0.5% of the registered value will be taxed.
- How much of these taxes will be paid by the seller and how much will be paid by you, the buyer, should be negotiated before going to the land department and written into the sales contract.
Income Tax (Withholding Tax) from the Sale
Income from the sale of property is subject to Thai income taxation. The land department will withhold a prepayment of the property seller's gain from transfer of property is registered. The rates differ between natural and juristic persons when:
- the property seller is a company, the withholding tax is 1% of the sales price or 1% of the assessed value, whichever is higher.
- the property seller is an individual, the withholding tax is calculated on a progressive income tax scale.
Our Legal Services and Conveyancing
TLS provides a number of services that can help make the transfer of property easier for you.
- If it is not possible for you to go to the land office in person, we can prepare a Power of Attorney that will allow you to appoint our firm or a third party to conduct the transfer at the land office on your behalf.
- If you prefer to go to the land office yourself, one of our staff can accompany you to make sure your rights are protected.
- Before the official transfer of property at the land department, we will inform you of the documents needed and the approximate amount of money you will need for the taxes and administrative fees that must be paid.