Taxes due after selling land

[keestha]

From several sides I have been told that if a natural person or a company buys land and then later sells it, possibly including premises built on the land, and maybe making a profit in the process, he/she will be taxed fairly heavily. It might make a difference how long he/she has held the property. Is there anybody who knows percentages and other facts?

[ajahnlau]

Taxes are based on the selling price. Most sales made between private persons are usually reported lower so the seller pays a lower tax. I think it's about 2%. Improvements are not taxed. You would pay more tax if you bought bare land and then built on the property making it worth more.

[Oldfart]

Thiland doesn't yet have a separate Capital Gains Tax (no doubt because Thai property is more likely to devalue than appreciate). Profit, if any, on the sale of property is aggregated with any other income, and is therefore liable for personal income tax, at the relevant percentage.

There is a Government Tax payable on transfer of ownership, but this is a nominal sum.

As an aside, I would not recommend purchase of property in Thailand, especially as there are so many easier countries to make money  on property. Your homeland for  example!

[keestha]

A more detailed answer to this question came to me through a Phuket broker who has to deal with this matter frequently, it often hapens that foreigners buying property on the island are asked to pay the taxes that come with the transfer.

There is a transfer tax of 2%, stamp duty of 0,5%, and a business tax of 0,11% in case the old owner has had the property for less than 5 years. There is no Capital Gains Tax in Thailand, but as a replacement of this income tax is applied on all property sales, no matter if an actual profit has been made or not, and it is payable at the same time the sale is registered. The longer you have owned the property, the greater the percentage of the sale value is determined as income. After 1 yr of ownership 8% of the total assessed value is liable for income tax, after 2 years 16%, after 3 years 23%, and so on until a maximum of 50% is reached after 8 years, it doesnt get higher than this. This income is than converted to an annual rate based on the number of years that the property has been owned. The resulting annual income will than be assessed at the normal personal income tax rates, a progressive rate ranging from 5% for he first 100000 Baht, 10% btween 100000 and 400000, and thereun up to a maximum of 37% for amounts over 4000000 Baht. The property's sale value for taxation is determined at the District Land Registry office at the time of the sale and is based upon books of tables of land values by location and building value held at the Land Registry Office. These official tables are updated every five years or so, and serve as a broad guideline.