Disturbing new trend, buyer pays half the sellers taxes ????

[Peterw42]

I have been looking around for pandemic bargain condo. And starting to see a disturbing trend where, instead of the usual 50/50 split on the 2% transfer fee, Agents (usually russian) are pushing a 50/50 split on all the sellers tax obligations. And trying to make out its the normal process.

 

The taxes are usually

Specific Business Tax 3.3%	: the seller's duty
Stamp duty .5%	: the seller's duty
Transfer fees 2%	: the buyer's duty or shared
Withholding tax (income tax at nominal rate)	: always the seller's duty

 

This can mean the difference between half of 20k, to half of 200k.

Is anyone else noticing this.

 

[Thailand]

Just say no and see how quickly the requirements change. Had that when selling a house recently.

[scubascuba3]

Yes I've seen that also, just say you pay transfer fees 2% or 1% only, if they say no and you feel strongly pull out

[spidermike007]

The market is horrendously weak at this time for condos. As a buyer with cash, I would be asking for 40% off the sales price and the seller pays ALL fees. 

 

Or I walk. There are thousands of bargains out there being offered by more motivated sellers. And besides since when have we started listening to the advice of Russian brokers, or bowing to silly demands? 

[Peterw42]

39 minutes ago, scubascuba3 said:

Yes I've seen that also, just say you pay transfer fees 2% or 1% only, if they say no and you feel strongly pull out

Yes, that's a given, have walked away from 3 viewings (without bothering to view) .

 

[Peterw42]

39 minutes ago, spidermike007 said:

The market is horrendously weak at this time for condos. As a buyer with cash, I would be asking for 40% off the sales price and the seller pays ALL fees. 

 

Or I walk. There are thousands of bargains out there being offered by more motivated sellers. And besides since when have we started listening to the advice of Russian brokers, or bowing to silly demands? 

I agree. You would think it would be the opposite at the moment. Buyer pays all fees etc

They do it so the list price can be very low. Went to look at an 800k condo, which in reality, after paying sellers tax came to over 1 mill

[scubascuba3]

31 minutes ago, Peterw42 said:

Yes, that's a given, have walked away from 3 viewings (without bothering to view) .

 

i would do the negotiations after viewing for fees, for condo price in advance i agree

[scubascuba3]

27 minutes ago, Peterw42 said:

I agree. You would think it would be the opposite at the moment. Buyer pays all fees etc

They do it so the list price can be very low. Went to look at an 800k condo, which in reality, after paying sellers tax came to over 1 mill

800k to 1m doesn't sound right, how do you calculate that?

[GrandPapillon]

1 hour ago, Peterw42 said:

I have been looking around for pandemic bargain condo. And starting to see a disturbing trend where, instead of the usual 50/50 split on the 2% transfer fee, Agents (usually russian) are pushing a 50/50 split on all the sellers tax obligations. And trying to make out its the normal process.

I have seen the same over a decade with Thais, they also do it on big deals. It's more like a "goodwill" gesture for them, works well in a hot market when you are competing for deals.

 

In this market, get a huge discount on the property and then pay 50% of the tax to make them happy. It's like a bribe thing for them, purely "political". At the end what matters is the final cost of the property and how below the market it is.

 

Alternatively, you could pay official price to break even on the tax, and then additional price in cash under the table.

[scubascuba3]

1 minute ago, GrandPapillon said:

 

Alternatively, you could pay official price to break even on the tax, and then additional price in cash under the table.

you pay the tax of the land office value, condo office should also have a copy, doesn't matter what you sell at

[GrandPapillon]

2 minutes ago, scubascuba3 said:

you pay the tax of the land office value, condo office should also have a copy, doesn't matter what you sell at

price is probably above that value, and it's possible that the previous owner paid more than the land office value. If it's a company buying, you can play the gain/loss there.

 

The transfer tax used to be on the sale price, maybe that changed now.

[Peterw42]

50 minutes ago, scubascuba3 said:

800k to 1m doesn't sound right, how do you calculate that?

Yes, it wasn't that much, I was using round figures to make the point.

I think I did a quick calc on the day and it was something like 70-80k, the main tax being the withholding tax as the property had been owned for 9 years (for some unknown reason it gets bigger over time)

[Peterw42]

50 minutes ago, GrandPapillon said:

 

The transfer tax used to be on the sale price, maybe that changed now.

 

Its done on whichever is the highest, land office appraised price or sale price.

Nowadays its not uncommon for the appraised price to be higher than even the made-up sales price.

[ChaiyaTH]

Guess it depends where you are as in Chiang Mai a bigger property company just did a promotion with 0.01% transfer fees on second hand properties up to 3 million baht.

[smutcakes]

Its not that unusual, taxes are just another negotiation factor.

If you are searching in the 800-1K bracket and squabbling about taxes, even if you had to adsorb all 6.3% you are talking about a couple of thousand USD. If its a great condo in great location and position, sometimes its best to get it and forget about the extra money. 

[2009]

Who would put themselves through the gauntlet of buying property from a Thai here? 

 

Just hang them out to dry for a bit. 

[OneMoreFarang]

27 minutes ago, 2009 said:

Who would put themselves through the gauntlet of buying property from a Thai here? 

 

Just hang them out to dry for a bit. 

Could it be that most property in Thailand is sold by Thai people?

And sometimes these Thai owners don't know much about selling property. Maybe they did it only one time in their life and maybe that was a long time ago.

[Peterw42]

14 hours ago, ChaiyaTH said:

Guess it depends where you are as in Chiang Mai a bigger property company just did a promotion with 0.01% transfer fees on second hand properties up to 3 million baht.

That's nothing to do with location, the 0.01% transfer is a recent national announcement to stimulate economy etc, applies all across Thailand for a limited period.