Taxes
on transfers of land, buildings or condominiums There
is no capital gains tax as such in Thailand. An income tax (withholding
tax) which does apply is comparable. Entities that sell land,
buildings, or condos must pay a 1% income tax withholding. Individuals
must pay at a rate of 0-20% (depending on “income”
or appreciation) at the time the transfer is made. The tax is
based on the assessed value, less a standard deduction for the
amount of time the seller has owned the property.
The
land transfer fee for transferring ownership to land, buildings
or condominiums is 2% of the registered value, regardless of
the amount stated in the sales agreement. Whether the buyer
or seller pays the fee depends on the terms of the Purchase
and Sale agreement. In addition, there is a stamp duty of 0.5%
based on the actual purchase price or the registered value,
whichever is higher. The party responsible for payment can also
be set forth in the Purchase and Sale agreement. For property
held less than five years (less than one year for a registered
domicile) there is also a specific business tax of 3.3% of the
declared amount.
Fees
on Leases Persons who lease land, buildings or condominiums
(or hold other similar rights, such as superficies, usufruct
or habitation) pay a 1% fee of the assessed rental value for
the entire term. In other words, the total assessed rental value
for the term is calculated and the tax is paid on the total
amount.
Fees
on Mortgages The fee for registering a mortgage on
land, buildings or condominiums is 1% of the amount stated in
the mortgage agreement, up to a maximum fee of Bt200,000. In
addition, proof must be presented that the 0.5% stamp duty due
on a loan agreement (subject to a maximum duty of Bt10,000)
has been paid.
Changes
in the Law
Under
the Thai parliamentary system, changes in the law are usually
initiated at the ministerial level with affirmation by parliament.
It is not uncommon for ministerial officials to discuss proposed
or possible changes in the law in the news media long before
such changes are (if ever) enacted. Liberalization of land law
in order to attract foreign investment, such as by retirees,
is one such area of periodic discussion. However, a prudent
foreign investor should consult with an attorney with regard
to the current status of the law rather than relying on media
reports.
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