We discuss below the taxes and fees that arise in the sale, purchase, mortgaging and leasing of land.

Fees on transfers of land, buildings or condominiums

The land transfer fee for transferring ownership to land, buildings or condominiums is 2% of the officially assessed land value, regardless of the price declared. In addition, stamp duty of 0.5% is payable, based on the amount declared or the officially assessed value, whichever is higher. A person who sells land or buildings having owned it for less than five years (less than one year, if the owner has his registered domicile at the place being sold) is also liable to pay specific business tax of 3.3% (inclusive of municipal tax) of the declared amount. But if SBT is paid, then the 0.5% stamp duty referred to above is not payable.

Sale by a company or juristic partnership

Where a company or juristic partnership sells land, buildings or condominiums, there is a 1% income tax withholding payable at the Land Department office. Full corporate income tax (the current general rate is 30%) is payable on the company’s total net income, at the time the seller files its annual or semi-annual corporate income tax return. A tax credit is allowed for the 1% withheld.

Sale by a natural person

A natural person who sells land, buildings or condominiums (but not in the course of a business) must pay income tax on any capital gain at a rate from 0% to 20%, at the time the transfer is made. The tax is based on the assessed value, less a standard deduction based on the length of time that the seller has owned the property. The usual personal tax rates (currently 10-37%), are applied to the deemed profit, but in any event the tax may not exceed 20% of the gross sale price. When a natural person files his annual income tax return, he can choose to declare the actual profit of loss, or he can ignore the matter, and the tax paid at the registration office will be deemed to be the actual tax.

Fees on lease registration

A natural or juristic person who registers a lease of land, a building or condominium (or other similar right, such as a superficies, usufruct or habitation) pays a 1% fee on the assessed rental value. In other word, the total monthly or assessed rental value for the lease term is calculated, and the tax is payable on the total amount, In addition, there is stamp duty payable of 0.1% off the above figure, and additional stamp duty of 0.5% based on the receipt of rent or any prepaid rental as referred to in the lease. If there is no prepaid rent, this stamp duty is not due until the rent is actually paid and a receipt given.

Fees for mortgage registration

The fee for registering a mortgage on land, a building or condominium is 1% of the loan amount declared in the mortgage agreement, with a maximum fee of Baht 200,000. In addition, proof must be presented that the 0.05% stamp duty due on a loan agreement (subject to a maximum duty of Baht 10,000) has been paid. If the stamp duty has not yet been paid, it must be paid at the time that the mortgage is registered.

Tax on gains from the sale of property

Where a natural person is selling property for commercial purposes (e.g. as a property developer), then such profits form part of its total income liable to income tax. The tax applicable is calculated on a sliding scale, based on the years of ownership. The standard personal tax rate bands of 10-37% are then applied. But a gain arising on the sale of a principal residence of a natural residence of a natural person is exempt from tax, where another principal residence is purchased within one year from the date of sale.