I was charged stamp duty based on condo appraised price rather than sales price? Land office are wrong?

[Card]

I recently sold my condo near Pak Chong for 3.5M baht. The appraised value at the Pak Chong office was 5,803,839.

 

FYI,  I sold at 3.5M baht because it had been on the market starting at 4.7M baht and then I reduced the price stepwise over several years with little interest until I reached the sweet spot of 3.5M. Land prices have soared in Pak Chong over the last decade, hence the high appraised price.

 

Anyway, the overall fees and taxes came to a shocking 315,315 baht which I duly paid. However, on closer inspection I found that most of the taxes seem to have been calculated according to what I have read on the internet, ie. on the highest (appraised) price. However, the internet says that the stamp duty is based on the ACTUAL sales price. I was charged stamp duty of 29,025 which means the stamp duty was based on the appraised price. The overcharge in my case is almost 12000 baht.

 

A Thai friend phoned the land office in question and they said that they charged stamp duty on the basis of the appraised price because the sales price was unusually low. I assume this was meant that they do not believe that I sold the condo at such a low price compared to their appraised price and yet it is genuine (I know the sales price of condos is often under reported to reduce stamp duty, but not in my case).

 

What I need to know is is this an irregular charge? Has anyone on the forum been charged stamp duty based on appraised price, or even the highest price of the two? Is there a link to a website that claims that stamp duty is charged on any other basis than sales price?

 

 

[MrJ]

thats common practise in Pattaya land office as well as many deals have been done with fake/low prices in order to lower the fees.....

[Destiny1990]

Seems very high fees 315 k for a 3,5 M condo. And this amount u share with the buyer 50:50 or?

[bojo]

Spiteful fees for sure..................for years fees IMO were really low as based on low appraisals countrywide, however, now, seems like 21st Century Thailand aint quite the backwater it once was.............Land offices have upped their game so to speak... Not sure how one would challenge a higher appraised value on the day, apart from aborting transfer, but if you or your agent phones ahead, you will know the value in advance......

[4MyEgo]

20 hours ago, Card said:

What I need to know is is this an irregular charge? Has anyone on the forum been charged stamp duty based on appraised price, or even the highest price of the two? Is there a link to a website that claims that stamp duty is charged on any other basis than sales price?

 

From what I have read is that they actually do calculate the stamp duty here based on the appraised price, in this case the higher value.

 

https://www.acuterealty.com/calculator.asp

 

It appears things in Thailand are done a little different to where I come from as stamp duty is paid when we purchase the property, not when you sell it.

 

The above said if you think that the 12,000 baht is worth challenging, then you will want to polish up on Thai property law which I know nothing about. I know back in my country when we used to pay land tax on an investment property (annually) you would have 42 days to challenge it, however you would first have to find a property Valuer prepared to do a valuation report for you for that government department to forward to the Valuer who valued the property and if that Valuer (usually working for a firm who was contracted to value the entire area), then the Valuer would have to respond to the government department and explain his findings or make his adjustments based on sales evidence similar to the property, this would have already been done by the Valuer you employed to provide you with a valuation report under the sales evidence section. I once challenged them and won, however I didn't require the services of a Valuer, I knew that the council changed the zoning on the townhouses I owned from medium density residential to low density residential which meant if those townhouse burnt down tomorrow I could only built half of them, but the Valuer was still valuing my townhouses on the medium density residential basis which gave them a higher value which was wrong. 

 

The above said, unless you know of similar condos that have sold in you complex for similar or less value than yours, I would take it on the chin, because we all know about face here and while 12,000 baht might sound like a lot to some, the afro and time to get it back might not be worth it, therefore perhaps put it down as a learning experience, or take the bone and crush skulls.

 

Good luck.

Edited April 9, 2021 by 4MyEgo

[BritManToo]

36 minutes ago, bojo said:

Not sure how one would challenge a higher appraised value on the day, apart from aborting transfer,

i think you've already suggested the answer.

Or tell the seller they have to pay the extra. 

[Peterw42]

OP, The fees and taxes are always calculated on whichever is the highest of the two values, appraised value or sales value. (not sure where you found information that says otherwise) If you think about it, it cant be any other way, otherwise everyone will be claiming a lower sales price (and nobody will be declaring a higher value). Its the whole idea of an appraised value.

 

I don't think there is ever a sale where the money that changes hands matches the appraised or declared value. Land office doesn't care less what a condo sold for, they want fees and taxes on their appraised value. (nobody will be declaring a higher than appraised sale)

If you sold for 10 million baht, would you be insisting on the sales value ?

Edited April 9, 2021 by Peterw42

[Card]

1 hour ago, Destiny1990 said:

Seems very high fees 315 k for a 3,5 M condo. And this amount u share with the buyer 50:50 or?

No, I agreed to pay the whole transfer costs, thinking they would be quite low - the only mistake I regret from the sale. I wouldn't do it again, but then I don't intend to buy any more properties in Thailand or elsewhere.

[Card]

37 minutes ago, 4MyEgo said:

 

From what I have read is that they actually do calculate the stamp duty here based on the appraised price, in this case the higher value.

 

https://www.acuterealty.com/calculator.asp

 

It appears things in Thailand are done a little different to where I come from as stamp duty is paid when we purchase the property, not when you sell it.

 

The above said if you think that the 12,000 baht is worth challenging, then you will want to polish up on Thai property law which I know nothing about. I know back in my country when we used to pay land tax on an investment property (annually) you would have 42 days to challenge it, however you would first have to find a property Valuer prepared to do a valuation report for you for that government department to forward to the Valuer who valued the property and if that Valuer (usually working for a firm who was contracted to value the entire area), then the Valuer would have to respond to the government department and explain his findings or make his adjustments based on sales evidence similar to the property, this would have already been done by the Valuer you employed to provide you with a valuation report under the sales evidence section. I once challenged them and won, however I didn't require the services of a Valuer, I knew that the council changed the zoning on the townhouses I owned from medium density residential to low density residential which meant if those townhouse burnt down tomorrow I could only built half of them, but the Valuer was still valuing my townhouses on the medium density residential basis which gave them a higher value which was wrong. 

 

The above said, unless you know of similar condos that have sold in you complex for similar or less value than yours, I would take it on the chin, because we all know about face here and while 12,000 baht might sound like a lot to some, the afro and time to get it back might not be worth it, therefore perhaps put it down as a learning experience, or take the bone and crush skulls.

 

Good luck.

Agree not worth it now as most opinions (and my newly researched internet) suggest that the appraisal value is usually used for stamp duty. It wasn't so much the cash, rather than the principle that I was concerned about.

[Card]

15 minutes ago, Peterw42 said:

OP, The fees and taxes are always calculated on whichever is the highest of the two values, appraised value or sales value. (not sure where you found information that says otherwise) If you think about it, it cant be any other way, otherwise everyone will be claiming a lower sales price (and nobody will be declaring a higher value). Its the whole idea of an appraised value.

 

I don't think there is ever a sale where the money that changes hands matches the appraised or declared value. Land office doesn't care less what a condo sold for, they want fees and taxes on their appraised value. (nobody will be declaring a higher than appraised sale)

If you sold for 10 million baht, would you be insisting on the sales value ?

But many people do lie about the sales value to reduce it below what they calculate to be the appraised value. It is very common. 

[Peterw42]

25 minutes ago, Card said:

But many people do lie about the sales value to reduce it below what they calculate to be the appraised value. It is very common. 

That's why there is a land office appraised value, to stop people lying about the sales value.

[Card]

13 minutes ago, Peterw42 said:

That's why there is a land office appraised value, to stop people lying about the sales value.

People esp estate agents still do it so there must be a profit in it somewhere.

[4MyEgo]

1 hour ago, Card said:

rather than the principle that I was concerned about.

That word "principal" which we grew up on has to be let go here, easier said than done, different culture, different world, "principal" doesn't exist to them IMO. As soon as I let go of that word "principal" here, I learnt to survive a little better, suffice to say I think, twice, three times before I make a transaction monetarily wise and if I feel I cannot let go of the "principal" I will pull out of it and make sure they learn, if that's all possible, two words, "missed opportunity" which is usually snubbed off with that "up to you" face.

[Mayhem11]

Most jurisdictions use the full ad valorem value for the calculation of stamp duty. Full ad valorem value is market value. This is to avoid fraud, where the contract states a gross undervalue. I would appeal the decision if the lower value is true market value or I would stop whinging.

[Card]

34 minutes ago, Mayhem11 said:

Most jurisdictions use the full ad valorem value for the calculation of stamp duty. Full ad valorem value is market value. This is to avoid fraud, where the contract states a gross undervalue. I would appeal the decision if the lower value is true market value or I would stop whinging.

There is always one, and you are it.

Edited April 9, 2021 by Card

[chrisandsu]

How long did you own it for ? If memory serves me right if it’s less then 3 years (could be 5) you pay the higher penalties for selling early . 

[Tubulat]

Now on this days you don't have to lie about the prices, you'll always get a lower price as where you buy for it.

As OP says, I have the same experience now, I can sale the condo for 2M, and bought it 6 years ago for 2,3.

The landoffice calculate the price over 2,3M

It is what it is.

When they can cheating you....

Today I went to an Apple service store to pick up my Mac-mini less than a year old, so warranty, but....they thought it necessary to remove some dust, and voila, 1200 thb!! Cleaning costs.

[natway09]

Regardless of what you sell for the land office has it's own improved value for the area & size. 

You may contest, but is a cumbersome process