Issues selling condo owned by a foreigner v selling owned by Thai

[Larkin]

My wife owns a decent condo in Sukhumvit.   According to similar condos in the same building for sale it's worth around 8-8.5 million.

 

For a variety of reasons too complicated to go into, she will be transferring ownership to me this year.  There are no issues re the allocation of foreign owned units in the building, so that's not a worry.

 

My question is this:  If i wanted to sell the condo, are they any issues i need to be aware of regarding transfer fees or taxes which make it more expensive for me as a foreigner, rather than selling it while it's still in my wife's name?

 

The only POTENTIAL thing i can think of (and I may have this wrong) is that property sold within 3 years of acquisition seem to incur a higher property tax than those held from over three years.  Is that correct, and if so what's the difference?  I don't think the nationality of the owner impacts that, though

 

Is there anything else I need to be aware of?

 

 

thanks

 

 

[Peterw42]

There is an extra tax of 3.3% if a condo is sold within 5 years (not 3 years) but it doesn't apply to a condo you live in, the tax applies equally to Thai or foreigner. There are no extra costs/tax for a foreigner

If your wife has owned the condo for less than 5 years the 3.3% would be payable when transferred to you, and you would need to wait 5 years to then sell without the 3.3%, (unless as above its your principle residence)

Edited March 23, 2021 by Peterw42

[Larkin]

Thanks Peter.   Just to clarify further:  when you say an 'extra tax' of 3.3%, what is that extra to?  Could you expand please?

 

She has owned it more than five years and it has been her principle residence during that time, so I am assuming she would not be liable to any additional tax when transferring it to me.  However, what tax would she be liable to, if any.  We are proposing a straight transfer to me:  not a sale.

 

 

[couchpotato]

5 minutes ago, Larkin said:

Thanks Peter.   Just to clarify further:  when you say an 'extra tax' of 3.3%, what is that extra to?  Could you expand please?

 

She has owned it more than five years and it has been her principle residence during that time, so I am assuming she would not be liable to any additional tax when transferring it to me.  However, what tax would she be liable to, if any.  We are proposing a straight transfer to me:  not a sale.

 

 

For any dwelling sold or transferred within 5 years of purchase, there is a 3.3% business tax, on top of the normal (minimal) transfer fees. So if the name is changed (call it sale or transfer) to you on the chanoot, then the normal transfer taxes are applicable. You can google these tax %'s, and lots of other information very easily.

So for your question--She has owned it more than 5 years, so the the business tax does not apply.

But as the previous poster advised, if after you own it, and sell within 5 years, then the business tax will come into play. Also as posted the taxes/fees etc are the same for Thai or foreigner.

I believe we have answered your specific questions.

[Peterw42]

52 minutes ago, Larkin said:

Thanks Peter.   Just to clarify further:  when you say an 'extra tax' of 3.3%, what is that extra to?  Could you expand please?

 

She has owned it more than five years and it has been her principle residence during that time, so I am assuming she would not be liable to any additional tax when transferring it to me.  However, what tax would she be liable to, if any.  We are proposing a straight transfer to me:  not a sale.

 

 

Normal fees are around 2.5% (of what the land office says it worth) and payable on any sale/transfer of name. Transfer from wife to you would be considered a sale and would incur the normal fees.

 

https://www.samuiforsale.com/real-estate/condominium-transfer-tax-and-fees.html

 

[YT3k72Em]

You will also need to show proof of bringing the amount foreign currency into Thailand equal to the sale value.

[Larkin]

4 hours ago, YT3k72Em said:

You will also need to show proof of bringing the amount foreign currency into Thailand equal to the sale value.

 

Thanks, but there will be no 'sale value.'   It is a simple transfer of ownership from her to me - no money will change hands.

[Delight]

1 hour ago, Larkin said:

 

Thanks, but there will be no 'sale value.'   It is a simple transfer of ownership from her to me - no money will change hands.

 This is a regular mis understanding.

As far as the land office is concerned a transfer is a transfer.

They have no interest in the price of the property in your  current circumstances.

In your case they will use the apprased value of the condo.

A second sheet of paper is provided when a new owner receives their Condominium Title Deed.

On this 2 nd sheet of paper will be written this appraised value.

The calculation to estalish the transfer tax will start using this appraised value.

 

If your  wife  transfers the condo to you -and you at some stage sell the condo to 3rd party -then 2 sets of transfer charges will occur.

 

 

[Delight]

6 hours ago, YT3k72Em said:

You will also need to show proof of bringing the amount foreign currency into Thailand equal to the sale value.

 This is 100% the case.

Given that  there is no actual sale then the amount of money which has to be brought in to Thaialnd  has to at least equal the appraised value. I referred to the appraised value in my earlier posts.

 

So your plan will involve your bringing into Thailand potentially alot of money (to obtain the FET )and then having to pay transfer fees.

 

I assume that you have a very strong motive!

 

[Larkin]

2 hours ago, Delight said:

 This is 100% the case.

Given that  there is no actual sale then the amount of money which has to be brought in to Thaialnd  has to at least equal the appraised value. I referred to the appraised value in my earlier posts.

 

So your plan will involve your bringing into Thailand potentially alot of money (to obtain the FET )and then having to pay transfer fees.

 

I assume that you have a very strong motive!

 

 

 

This is very helpful, thanks.

 

Let me see if I have this right.  For the sake of argument, let's assume my wife and agree that I will buy the condo for a nominal sum of 100 baht.    

 

Irrespective of our private agreement, when it comes to making the legal transfer at the Land Transfer Office (apologies if i have the terminology wrong), the officials will always look at the higher level of either the sale price or the appraised value, in this case, say, 8m baht.

 

Now, I get that any transfer fees / taxes would be assessed on that higher value - no problem with that.

 

Are you also saying that I would need to go through the process of transferring that 8m baht to Thailand, regardless of whether it's being used in the transaction or not?  

 

If so, that's interesting.   It could be done, but Id need to assess the merits of whether it's worth it.

 

You ask about motives.  Good question.  Nothing too complex; just a rebalancing of relative marital assets based on another property purchase in Thailand last year.

 

Thanks for the helpful input.  I have a call with a guy from Siam Legal tomorrow.  He has mentioned another option:  a pre-sell and pre-purchase agreement with an assignment clause to a (yet unknown) future buyer option.    He is suggesting that would preclude the need for any funds transfer and/or tax and fees issues right now.

 

 

[Delight]

3 hours ago, Larkin said:

 

 

 

 

 

 

Are you also saying that I would need to go through the process of transferring that 8m baht to Thailand, regardless of whether it's being used in the transaction or not?  

 

 

 

 

 

 

  Yes -the transfer charges have to be made. 

Given that no money will change hands as part of the transfer -then the transfer charges will be based on the appraised value.

Secondly - a Foreign Exchange  Transfer Certificate (FET)  issued by your bank  is required.

The transfer will not take place unless this FET is presented to the Land Office. 

It is the appraised value that has to be brought into Thailand.

You can transfer it back after the FET is issued.

Edited March 24, 2021 by Delight
removing detail

[SGD]

If I may ask a tag on question which I think has some relevance.

If I bring in 5m and get a FET and purchase a condo and then sell it for 10m but I wish to buy a new condo at 10m, is this an issue with my original FET only being for 5m and there being a period of time between the first purchase and the second purchase.

 

It would seem illogical to have to bring in another 5m (or to send the second 5m or even the whole 10m on a holiday outside Thailand) but hey, TIT ????

[Card]

3 hours ago, SGD said:

If I may ask a tag on question which I think has some relevance.

If I bring in 5m and get a FET and purchase a condo and then sell it for 10m but I wish to buy a new condo at 10m, is this an issue with my original FET only being for 5m and there being a period of time between the first purchase and the second purchase.

 

It would seem illogical to have to bring in another 5m (or to send the second 5m or even the whole 10m on a holiday outside Thailand) but hey, TIT ????

Not illogical. The Thai govt does not want farangs making a living speculating on property by bringing in an initial lump sum to the country then recycling it over and over. They want some transparency and control, I guess.

[Delight]

12 hours ago, SGD said:

If I may ask a tag on question which I think has some relevance.

If I bring in 5m and get a FET and purchase a condo and then sell it for 10m but I wish to buy a new condo at 10m, is this an issue with my original FET only being for 5m and there being a period of time between the first purchase and the second purchase.

 

It would seem illogical to have to bring in another 5m (or to send the second 5m or even the whole 10m on a holiday outside Thailand) but hey, TIT ????

 In the circumstances that you describe you will still need a new FET to cover the 10M.

You have 2 choices :

1) Send back the 10 M and then bring in 10M.This makes the whole process 100% legal.

 

or

 

2) Speak with your bank manager and do a deal.