Condominiums in Thailand are regulated by the Condominium Acts of Thailand and are registered with the Thailand Land Department. Ownership of a condominium unit is, officially transferred through proper registration at the Land Office. There are taxes and fees payable upon registration, including transfer fee, income tax / withholding tax, stamp duty or specific business tax / local development tax. Specific business tax applies to commercial sales of a condo unit – a unit that has been owned by the seller for less than five years. Over that, stamp duty applies. When dealing with a condominium unit purchase, it is imperative that a registered real estate lawyer Phuket will assist you in the various legalities associated with it.
Transfer fee and income tax which are payable to the government upon registration with the Land Office are calculated based on the Land Office’s appraised value of the condominium unit. On the other hand, the stamp duty or specific business tax calculations are based on the Land Office’s appraised value of the condominium unit, or the sale price of the unit, whichever is higher.
- Transfer fees at 2%; the buyer’s duty or shared
- Specific Business Tax 3% + 10% local municipal tax over the amount of Specific Business Tax = total tax of 3.3%; the seller’s duty or shared
- Stamp duty; the seller’s duty or shared between the seller and purchaser (does NOT have to be paid if Specific Business Tax is paid)
- Withholding tax; as this relates to seller’s personal or corporate income tax this should be the seller’s duty only.
In essence, the higher the appraised value, the more expensive the fee applicable upon registration of ownership of the condominium unit at the Land Office will be. A sample calculation for a residential condominium in Phuket with a market or appraised value of Baht 91,000 per square meter is shown below.
- The registration fee payable upon registration of ownership of a 200-square-metre unit would be B91,000 x 200 = B18.2 million x 2 per cent, or B364,000.
If the condo unit was owned by the seller, for not more than five years, it will be subject to specific business tax, at a rate of 3.3 per cent of the appraised value or the actual sales price, whichever is higher.
- Using the same example, the specific business tax would be B18.2 million x 3.3 per cent, or B600,600.
Stamp duty would apply if the condominium unit was owned by the seller for more than five years, which is 0.5 percent of the appraised value.
- Using the same example, stamp duty would be B18.2 million x 0.5 per cent, or B91,000.
The income tax applicable varies as it is based on certain deductions. The calculation is made through a specific formula created by the legislature, which takes into account how long the property has been owned and the progressive tax rates up to 37 per cent of the profit made by the seller calculated from the difference between the appraised value at the time of purchase and the time of sale.
Getting advice from real estate lawyer in Phuket will help ease up the process of condominium registration and the security of having things done the right way will arise.
