Income tax on house sale

[Promula]

If you buy a house in Thailand with a mixture of savings and mortgage and then need to sell it soon afterwards, is the entire sales revenue classed as taxable income even though it'll be used to repay the mortgage and replenish the savings?

[freeworld]

45 minutes ago, Promula said:

If you buy a house in Thailand with a mixture of savings and mortgage and then need to sell it soon afterwards, is the entire sales revenue classed as taxable income even though it'll be used to repay the mortgage and replenish the savings?

The taxes are paid on gains ie any profit above what you purchased it for. Withholding taxes/income tax on the gain at the progressive tax rates in the revenue code.

 

You will pay back the bank back the debt you hold with them, there are also possibly penalties when paying the debt off early.

 

The taxes/fees are:

1. Transfer Fee (50/50 buyer/seller)

– 2% of the official government Appraised Value (usually shared between buyer and seller 50/50)

 

2. Specific Business Tax (seller)

If you have owned the property for less than a year, the Business Tax rate is 3% of the appraised value, if you have owned the property from 1-2 years, the rate is decreased to 2%, and if you have owned the property for 2-4 years, the rate is further reduced to 1%.

Moreover, if you have owned the property for more than 4 years, you may be exempted from this tax

 

3. Withhold Tax (WHT)/ Income Tax (seller)

- Appraised value at sale - appraised purchase value = gain (any gain taxed progressively and paid at the land office)

– Years of Ownership (with Standard Deduction of Expenses)

 

Edited October 13, 2023 by freeworld