General Information
In Thailand, taxes and fees on real estate sales do not depend on whether the seller sold it at a loss, for example, having bought it earlier at a higher price. The seller is required to pay taxes in any case. The total tax burden when selling real estate in Thailand is approximately 5-7% of the selling price. Taxes depend on the duration of ownership, the cadastral value of the property, and the selling price.
When selling real estate, such as a condominium unit, the following taxes and fees apply:
- Registration fee
- Tax on certain types of business (if applicable)
- Stamp duty (if applicable)
- Withholding tax (income tax)
Taxes and Fees for Real Estate Sales in Thailand
Overview Table
| Tax/Fee | Real Estate Sale | Transfer of Lease Rights | Who Pays |
|---|---|---|---|
| Registration Fee | 2% | Not applicable | Seller/Buyer |
| Lease Registration Fee | Not applicable | 1% | Lessor/Lessee |
| Specific Business Tax (SBT) | 3.3% if applicable | Not applicable | Seller |
| Stamp Duty | 0.5% if applicable | 0.1% | Seller |
| Income Tax (Withholding Tax) | 1% or 5 – 35% | Not applicable | Seller |
Registration Fee
Who Pays: Usually, the seller and buyer equally share this fee, unless otherwise specified in the contract.
Amount: 2% of the cadastral value.
The registration fee for registering a lease right is 1% of the total rental payments.
Benefits for Thai Nationals
On April 9, 2024, the Cabinet of Thailand decided to reduce the registration fee to 0.01% for Thai nationals purchasing homes valued up to 7 million baht. This benefit will be in effect throughout 2024.
Previously, the preferential rate for Thai nationals was 1% for homes valued up to 3 million baht.
Specific Business Tax (SBT)
Who Pays: The seller – a legal entity, as well as an individual who owned the apartment for less than five years.
Amount: 3.3% of the selling price or cadastral value, whichever is higher. This amount includes the municipal tax.
Stamp Duty
When Charged: In cases where SBT is not applicable.
Amount: 0.5% of the selling price or cadastral value, whichever is higher.
The stamp duty for registering a lease right is 0.1% of the total rental payments.
Withholding Tax (WHT)
If the seller is a legal entity, the withholding tax is 1% of the selling price or the cadastral value of the property, whichever is higher.
If the seller is an individual, the tax is calculated on a progressive scale based on the cadastral value, taking into account the period of ownership.
Calculation of Withholding Tax
Step 1: Determining the Tax Base
To calculate the tax base, use the following formula:
Subtract the tax deduction from the cadastral value of the property, then divide the result by the number of years of ownership. If the apartment was owned for more than 10 years, calculations use a maximum period of 10 years, regardless of the actual duration of ownership. A partial year is considered a full year.
The tax deduction varies from 50% to 92%, based on the ownership period.
| Ownership Period | Tax Deduction (% of cadastral value) |
|---|---|
| One year | 92% |
| Two years | 84% |
| Three years | 77% |
| Four years | 71% |
| Five years | 65% |
| Six years | 60% |
| Seven years | 55% |
| Eight years+ | 50% |
Step 2: Determining the Tax Amount Using a Progressive PIT Scale
| Taxable Income (baht) | Rate |
|---|---|
| 0 – 300,000 | 5% |
| > 300,000 – 500,000 | 10% |
| > 500,000 – 750,000 | 15% |
| > 750,000 – 1,000,000 | 20% |
| > 1,000,000 – 2,000,000 | 25% |
| > 2,000,000 – 5,000,000 | 30% |
| > 5,000,000 | 35% |
Step 3: Calculating the Final Tax Amount
Multiply the value from the previous step by the number of years of ownership to determine the final tax amount due.
Example of Calculating Withholding Tax
Scenario: Selling an apartment three years after purchase.
Cadastral Value: 8 million baht.
Tax Deduction Calculation:
- Tax deduction: 77% of cadastral value.
- Deduction amount: 8,000,000 × 0.77 = 6,160,000 baht.
Determining the Tax Base:
- Tax base: 8,000,000 − 6,160,000 = 1,840,000 baht.
Annual Income:
- Income per year: 1,840,000 ÷ 3 = 613,333 baht.
Tax Calculation:
- On the first 300,000 baht at 5%: 15,000 baht.
- On the remaining 313,333 baht at 10%: 31,333 baht.
- Annual tax: 46,333 baht.
Total tax for three years: 139,000 baht.
Thus, the seller will have to pay a withholding tax of 139,000 baht.
Tax Calculation Table
| Description | Calculation | Amount, Baht |
|---|---|---|
| Value | Cadastral Value | 8,000,000 |
| Deduction | 77% | 6,160,000 |
| Tax Base | 8,000,000 − 6,160,000 | 1,840,000 |
| Annual Income | 1,840,000 ÷ 3 years | 613,333 |
| Annual Tax | 300,000 @ 5% + Remainder @ 10% | 46,333 |
| Tax Due | Annual Tax × 3 years | 139,000 |
For further examples of WHT calculations, refer to the Land Department of Thailand’s website.
Example of Calculating All Taxes for an Apartment Sale
Suppose the aforementioned apartment is sold.
- Sale three years after purchase.
- Cadastral Value: 8 million baht.
- Sale Price: 10 million baht.
Buyer’s Expenses:
- Registration Fee: 80,000 baht.
Seller’s Expenses:
- Registration Fee: 80,000 baht.
- SBT: 330,000 baht.
- WHT: 139,000 baht.
Total seller expenses: 549,000 baht.
Note: Sellers often incur additional expenses, such as agent’s commission.
The rules for distributing taxes and expenses may vary per contract, so it’s advisable to review relevant provisions before signing.
Also Read:
Real estate in Thailand
Leasehold in Thailand
If you have any questions regarding taxation or real estate in Thailand, please email me