Sell the House, Expenses?

[howto]

I and the family moved to the SE USA a year ago.
We are considering selling the house.
Location Pathumtani, Khlong Luang, Khlong Sam, close to Tallad Thai market
Land is 575 wah
House built in 1986,
2 story, 5 bedroom, 3 full bath.
Internal, detached Kitchen + Dining room.
External Cooking area
Large external storage bldg w/ maid room.

 

Spouse spoke to a realtor located in BKK late Nov.

Whom said it would sell for 8.5 Mill THB.
I expected more, perhaps 10.5 Mill.
Realtor fee is/would be 3%.
No contract signed (yet) and house is not listed.

 

Please, what 'fees' will be encountered in this sell.
Was told land assessed at 7000 THB/Wah.
Details are much appreciated.

[ukrules]

A little off topic but I've been looking into rental yields vs property prices lately and I wonder how much you would rent this for based on surrounding buildings, any idea ? I know you're looking to sell but I'm sure you have an idea.

 

I ask about this because I see houses being advertised for sale at 8-10+ Million Baht which have yields of only 2-3% - something's wrong there.

[dotpoom]

It depends on if the house is in a Thai name or Company name....if the latter just the 3% agents fee and around 10.000 Bt. to change name of company director.

[howto]

Thanks for the replies.

We are not interested in renting.

The house is in a Thai name, my wife.

 

There must be other fees besides

- the 7000 thb / wah assessment.

- the 3% realtor fee.

What of VAT, filing fees, etc. ?

[tryasimight]

1 hour ago, dotpoom said:

It depends on if the house is in a Thai name or Company name....if the latter just the 3% agents fee and around 10.000 Bt. to change name of company director.

And 100,000 for a lawyer as you fight deportation and blacklisting when they find out the company was purely set up to circumvent the land ownership laws. 

[Thaidream]

In addition to the agents fee of 3%-  there is a tax paid at the land office based upon the assessed value of the land and house by the land office. It is a percentage but at this time I do not know the exact current percentage. It was 1% at one time.

you might want to consider selling the house and land yourself- Talad Thai is a prime location- you could put up signs at the market or on a post close to 7-ll or on electric poles around the neighborhood. If I am not mistaken- Macro is near there and they may have a board you can post on. 

IMHO- Realtors do not really do much advertising nor do they pursue leads,  Expect about 6 months to 1 year to actually find an owner that has the money or can borrow it. A prospective buyer will want a copy of your wife's Id card and the Chanot as they will check the land office themselves. If someone has a real interest in purchase- draw up a contract - with a cash down payment and a due date for the balance and get a copy of their Thai ID card. If they refuse to give you a copy- they are either not really interested or are trying to act as an agent to sell your property and then claim the 3% fee.

If a prospective  buyer is going to finance the purchase- expect  to be contacted by the prospective buyer's bank as they will want to send a land survey group to measure the property and determine boundaries. This type of purchase is not final until the bank agrees to the prospective buyer's mortgage and then  yourselve and wife and bank and  buyer meet at the land office where a check in your wife's name is presented and all the documents finalized.

[khunPer]

To my knowledge you'll meet the following expenses as seller of property in Thailand...

 

Agent's fee (typically 3-5 percent).

 

Land Office tax, which can be based on the price the local land office has on file, or the actual sales price; it varies from office to office, but you can check fist, or the local real estate agent will know. Normally seller pay tax, and buyer pays transfer fee (of deed to another name).

 

Income tax. The seller will be taxable from the profit minus deductions for the time the property has been owned. It's a bit complicated calculation, but there is a web-page shared in ThaiVisa Forum some month ago, where you can get an estimate of the tax calculated.

 

You'll need an expert or lawyer to advise you.

 

There's however another page is this "Property Transfer Tax and Fee" from Thailand Law Online, which states...

Quote

3. INCOME TAX (Corporate Income Withholding Tax and Personal Income Withholding Tax)

The income derived on the sale/transfer property in Thailand should be declared in Thailand. The land department has an authority to withhold the income tax immediately upon the registration of sale/transfer of property. The rates of income tax payable by individual and legal person is different. A legal person is taxed at a fixed rate of 1% on the declared purchase price or the appraised value of the property, whichever is higher, this withholding corporate income tax at 1% will be applicable only when the seller is a legal person (limited company or partnership and etc.). An individual (Natural Person) is taxed in accordance with 3 different calculation methods depending on the location of the property and the mode of acquisition of the property as follows;

3.1    Calculation of Personal Income Withholding Tax for property which is not inherited property and not property which is acquired by gift.
The tax can be calculated by stages as follows:
·              Finding the appraised value of the property to be sold/transferred.
·        Finding the holding year of the property (How long the seller has owned ownership of property counted from the year of receipt of ownership until the year of transfer, any fraction of a year shall be deemed a full year)
·              Deduct/minus the appraised value with the deduction in accordance with the sliding scale as follows:

 

·              After minus the appraised value with the deduction as mentioned above you will find a result, then divide such result by the holding year, after division you will have YEARLY INCOME.
·              Calculate YEARLY INCOME TAX by using YEARLY INCOME in accordance with the tax table as follows: 

 

·              After follow with above stage, you will have the YEARLY INCOME TAX, finally, the PERSONAL WITHHOLDING INCOME TAX shall be the amount of the YEARLY INCOME TAX multiply by HOLDING YEAR (YEARLY INCOME TAX times HOLDING YEAR is PERSONAL WITHHOLDING INCOME TAX) 

SAMPLE CALCULATION FOR 3.1

·         For example, the appraised value of the property is 4,000,000 THB
·         At the transfer date, the seller has owned the property for 4 years and 2 months, so the holding year is 5 years.
·         Minus the appraised value (4,000,000 THB) with the deduction (65% of 4,000,000 THB)  = 4,000,000 – 2,600,000 = 1,400,000 THB.
·         The result from above is 1,400,000 THB, then divide 1,400,000 by 5 (Holding Year), after the division, we have the YEARLY INCOME of 280,000 THB.
·         Calculate YEARLY INCOME TAX by using YEARLY INCOME of 280,000 THB in accordance with the below tax table: 

 

For the amount of 100,000 THB, yearly income tax is charged at rate of 5% or 5,000 THB.
For the amount of 180,000 THB, yearly income tax is charged at rate of 10% or 18,000 THB.
The total yearly income tax for yearly income of 280,000 THB is 5,000 + 18,000 = 23,000 THB
·         As the final stage, the PERSONAL WITHHOLDING INCOME TAX shall be amount of 23,000 THB multiply by 5 (23,000 x 5 = 115,000 THB 
·         The personal withholding tax for the sample transaction is 115,000 THB

 

[howto]

@Thaidream

Thanks for the info, however we are not there so must use a realtor

I do fully understand what you are saying.

 

@khunPer

Excellent info, thanks.

'' but there is a web-page shared in ThaiVisa Forum some month ago ''

I searched and can't find it ,,,

used both TVF and google ,,,

and went back 40+ pages on this forum.

If anyone knows what that link may be, please post it.

 

Apologies for the slow replies, here I am 12 hours behind Thailand.

[Monomial]

8 hours ago, khunPer said:

To my knowledge you'll meet the following expenses as seller of property in Thailand...

 

Agent's fee (typically 3-5 percent).

 

Land Office tax, which can be based on the price the local land office has on file, or the actual sales price; it varies from office to office, but you can check fist, or the local real estate agent will know. Normally seller pay tax, and buyer pays transfer fee (of deed to another name).

 

Income tax. The seller will be taxable from the profit minus deductions for the time the property has been owned. It's a bit complicated calculation, but there is a web-page shared in ThaiVisa Forum some month ago, where you can get an estimate of the tax calculated.

 

You'll need an expert or lawyer to advise you.

 

There's however another page is this "Property Transfer Tax and Fee" from Thailand Law Online, which states...

 

 

I've seen this calculation before, and each time I am aghast at the amount of "withholding taxes" which seem far to far exceed the actual appreciation in a house, even if I was charged 37% of the profits selling. Many people even wind up taking a loss when selling their homes.

 

My question is, can you reclaim this withholding tax on your personal tax return, and if so, what documentation is required to do so? Houses/condos just aren't appreciating like they used to 20 years when this system was invented. Assuming that the house will appreciate in value by 50% over 8 years is just ludicrous in today's market.

 

 

[howto]

2 hours ago, Monomial said:

 

I've seen this calculation before, and each time I am aghast at the amount of "withholding taxes" which seem far to far exceed the actual appreciation in a house, even if I was charged 37% of the profits selling. Many people even wind up taking a loss when selling their homes.

 

My question is, can you reclaim this withholding tax on your personal tax return, and if so, what documentation is required to do so? Houses/condos just aren't appreciating like they used to 20 years when this system was invented. Assuming that the house will appreciate in value by 50% over 8 years is just ludicrous in today's market.

 

 

• Quote

Yes, I agree totally with your preception.

AND '' My question is, can you reclaim this withholding tax on your personal tax return''

NO

[howto]

I did find a 'calculator'

(built my own excel sheet anyway) ,,,

http://www.livingbangkok.com/calculator/index.php

* note there is no date attached to this

AND another (if you can read Thai) ,,,

http://rdsrv2.rd.go.th/landwht/landwht06_1.asp
http://rdsrv2.rd.go.th/landwht/formcal1.asp

 

 

[khunPer]

5 hours ago, howto said:

'' but there is a web-page shared in ThaiVisa Forum some month ago ''

I searched and can't find it ,,,

I also searched before posting, but also could not easily find it.

[khunPer]

4 hours ago, Monomial said:

I've seen this calculation before, and each time I am aghast at the amount of "withholding taxes" which seem far to far exceed the actual appreciation in a house, even if I was charged 37% of the profits selling. Many people even wind up taking a loss when selling their homes.

 

My question is, can you reclaim this withholding tax on your personal tax return, and if so, what documentation is required to do so? Houses/condos just aren't appreciating like they used to 20 years when this system was invented. Assuming that the house will appreciate in value by 50% over 8 years is just ludicrous in today's market.

That's how it seem to be when selling property in Thailand. The example with the 4 million baht property and a tax of 115,000 baht is little less than 3% tax.

 

I would have loved to pay 3% tax when I sold my property in my home country, before moving to Thailand – I paid almost 27% tax if calculated of the total sales price, calculated on my 17-year profit only it was 59%...

 

Your house in Thailand may decrease in value, but the land under the house will normally increase; of course depending of location, as anywhere else in real estate market.

 

If the house and land I live in was sold today for the same total price and was paid for it, it would as individual be taxed about 6% (not including transfer fee and stamp), if taxed on the sales price. I have had the property for 12 years, so one can consider it as 0.5% property tax per year.

 

I originate from a country with probably the World's highest taxation, where we in principle pay 1% of a property's appraised value in property tax every year – luxury estates are however taxed 3% – and for the land only an additional 1.6% to 3.4% a year of the appraised value; that helps accepting the present Thai property tax with a big smile...

[howto]

Found a on-line web calculator ,,,

in English ...

http://www.livingbangkok.com/calculator/index.php

 

In Thai ...

http://rdsrv2.rd.go.th/landwht/landwht06_1.asp
http://rdsrv2.rd.go.th/landwht/formcal1.asp

 

Here are 2 calcs (in English as I can't read Thai) ,,,

1'st assumes price of assessed land

Owner Status :     Individual
Selling Price : 8500000    Baht
The Land Department
Assessed Price : 4025000 Baht
Occupied Date : June 05 2004    
Transfer Date : January 18 2018    
House Registration Book
    Owner has registered his name in House Registration Book (Blue Book) more than 1 year
Property Type
    Private property, not in housing development or project
1. Transfer fee (2%) = 80,500
2. Specific Business Tax (3.3%) =
3. Stamp Duty (0.5%) = 42,500  (Occupied 13 year(s))
4. Withholding Tax = 151,250 (Occupied 10 year(s))
Total = 274,250 Baht
274250/8500000= 0.0322647058823529  = 3.22647 %

-----------------------------

2'nd is if assessed at selling price ,,,

Owner Status :     Individual
Selling Price : 8500000    Baht
The Land Department
Assessed Price : 8500000 Baht
Occupied Date : June 05 2004    
Transfer Date : January 18 2018    
House Registration Book
    Owner has registered his name in House Registration Book (Blue Book) more than 1 year
1. Transfer fee (2%) = 170,000
2. Specific Business Tax (3.3%) =
3. Stamp Duty (0.5%) = 42,500  (Occupied 13 year(s))
4. Withholding Tax = 375,000 (Occupied 10 year(s))
Total = 587,500 Baht
587500/8500000= 0.0691176470588235  = 6.91 %

 

Perhaps someone could 'sticky' the calculator links on this forum?

 

[baansgr]

Each land office has its own ideas. Rule of  thumb, expect about 5% in taxes/transfer fees. Wont be far off

[bobthomas]

12 hours ago, Monomial said:

 

I've seen this calculation before, and each time I am aghast at the amount of "withholding taxes" which seem far to far exceed the actual appreciation in a house, even if I was charged 37% of the profits selling. Many people even wind up taking a loss when selling their homes.

 

My question is, can you reclaim this withholding tax on your personal tax return, and if so, what documentation is required to do so? Houses/condos just aren't appreciating like they used to 20 years when this system was invented. Assuming that the house will appreciate in value by 50% over 8 years is just ludicrous in today's market.

 

 

I wonder if this is separate from the Business Tax, (generally around 3.5% of selling/appraised price). This is added if you have owned the property less than five years. I guess the Thai thinking is that if of you buy and sell a house in under five years you must be doing some type of business. How this could be considered a business, especially if you sold the property for less than you bought it for is beyond me! Theoretically, if you bought a house for 13 M Baht and sold it for 10 M Baht, less than Five years latter, you would still have to pay the 3.5% "Business Tax", plus the additional roughly 3 % for transfer fees, stamp etc. Rough calculation, the 8 M Baht house in Bangkok discussed in this thread would have a transfer fee of around 500,000. Baht.

[khunPer]

9 hours ago, howto said:

1. Transfer fee (2%) = 170,000
2. Specific Business Tax (3.3%) =
3. Stamp Duty (0.5%) = 42,500  (Occupied 13 year(s))
4. Withholding Tax = 375,000 (Occupied 10 year(s))

I'm wondering why the tax calculation stop at 10-year – did the same when I tried for 12-years – even the owing time is longer, i.e. 13-years..?

[Denim]

Save yourself some money and don't use an agent. They don't do anything you can't do yourself but want a lot of cash for nothing.

 

Sold two house in Bangkok by the simple method of putting a for sale sign up on the front gate. That simple measure brought in more interest than advertising on the various web sites etc. 

 

Potential buyers often cruise around looking for houses to buy the same as in the west. Very important too that your house is as well presented as possible with no rubbish left lying around and freshly pained or at least clean walls.

 

It is common ( although illegal ) practice for the seller and buyer to come to an agreement about the sale price but take 10 to 20 percent off this when going to exchange title deeds and cash at the land office. The tax saved is then split between both parties.