Subdivide, build and sell and repeat: best way to minimise tax

[danfoss5000]

Hi

I'm considering a long term (10 year+) plan to develop some land in Krabi.  Details below.

 

My wife has approx 4 rai in Krabi with good mountain view, quiet area maybe 10 or 15m drive from Ao Nang tourist area. 

 

I have a lifetime usufruct in my name over the land.

 

We are looking at subdividing it into 4 or 5 lots, all lots will all have road frontage and mountain view, then building a 4x3 decent size pool villa on the first lot for ourselves to live in. Quality western style build. 

 

Our theory is that Krabi tourism will continue to increase over the next 10 years and land prices and demand for this style of property will increase over that time.  There are already a number of pool villas around the area.

 

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Basic plan is:

 

Step 1

Subdivide into 4 or 5 lots

 

We have already spoken to the Krabi land office and this land is ok to subdivide

 

Step 2

Build first pool villa and live in it (house plan will be lodged with land office in my name)

 

Step 3

Once built and garden established etc live in it for a year then advertise for sale, if it sells for decent profit, sell

 

If it doesn't sell for decent price who cares, live in the nice pool villa forever, advertise it again every year or 2 until it sells for decent enough profit, no rush to sell

 

Step 4

If it sells, use the profit and repeat step 2 and build on the next lot

 

Step 5

Rinse and repeat until all sold

 

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I guess my goal is to minimise any applicable capital gains or others tax so the question is:

 

* should this be done thru a Thai company or is there no tax advantage to doing that?

 

* should the Thai company be setup and land transferred to company prior to step 1 or does it not matter (ie can it be done at step 3 and asset then transferred to company once build etc)? 

 

We will also consult a good lawyer however just wondering if anyone has experience with doing anything similar, ie subdividing and selling off land or land/house thru a Thai company vs selling as individual.

 

Thanks for any replies

 

Daniel

 

 

 

 

[papa al]

If you build a house

live in it and then sell it,

where will you live until next is completed.?

[danfoss5000]

1 minute ago, papa al said:

If you build a house

live in it and then sell it,

where will you live until next is completed.?

rent for ~6 months

[danfoss5000]

Initial advice from legal FYI for anyone following thread

 

Below are our initial observations based on your notes

 

1.                Individual / Company Structure

 

Individual ownership (via your wife) is more simplified.

 

However, if multiple villas are sold over time, the Revenue Department may treat this as a business, triggering Specific Business Tax (3.3%), withholding tax, and income tax, even though held in indiviudal’s name.

 

Company ownership allows better tax planning, especially for recurring sales.

 

You can deduct actual expenses (landscaping, build cost, interest, etc.), and only pay corporate income tax (20%) on net profits.

 

However, annual accounting, audits, and compliance costs (approx. THB 50,000 per year) must be factored in.

 

2.                Tax Efficiency and Sale Strategy

 

Regardless of structure, some cost efficiency can be achieved by structuring sale contracts to allocate transfer taxes and duties to the buyer (common in the property market).

 

We can advise on how best to draft these terms to remain enforceable and market-acceptable.

 

If this is a one-off sale, selling under your wife’s name may suffice.

 

If you aim to sell multiple units over time, establishing a Thai company early on (before subdivision or construction) is likely to result in better long-term efficiency and fewer tax risks.

 

 

[donx]

I realize you plan on building these houses one at a time so the price you expect to set for each house is likely to increase over time. Nevertheless, roughly how much do you expect to sell the houses for? According to your initial post, it appears that each house will have close to 1 rai of land. Who do you expect your customers to be?

 

I ask because my wife (Thai) and I plan on living in Krabi when I retire in the next 5 years and she wants to build a house with mountain views. Most of the villas I've seen for sale are built on relatively small plots of land. Your venture appears not to follow that approach which is refreshing.

[danfoss5000]

I'm expecting maybe in the 10 to 15m thb.  Expected customers maybe retirees from western countries (with thai wife) or cashed up russians buying thru a company or anyone that would normally buy in phuket or samui but getting priced out or sick of the overdevelopment there.

 

Looking on property websites examples of smaller blocks with smaller pool villas asking between 8 and 20m thb.  I understand that is just asking price not sale price but it gives a ballpark.

 

The house plan I'm looking to build is about 300m2 (which includes patio all around the house) 4x bed 3x bath and will be on 1600m2. L shape open plan house with all bedrooms and living areas opening onto the patio facing pool with mountain view, will also build a separate guest bungalow later (plan below).

 

Examples of asking prices in the area:

 

150m2 house, 750m2 block, asking 9m thb

https://www.fazwaz.com/property-sales/3-bedroom-villa-for-sale-in-sai-thai-krabi-u5345014

 

220m3 2 bedroom house on 450m2, asking 9m thb

https://www.fazwaz.com/property-sales/2-bedroom-villa-for-sale-in-ao-nang-krabi-u5364416

 

280m2 4 bedroom house, 1600m2 block asking 20m thb

https://www.fazwaz.com/property-sales/4-bedroom-villa-for-sale-in-ao-nang-krabi-u1649462

 

200m2 3 bedroom house on 400m2 block, asking 12m thb

https://www.fazwaz.com/property-sales/3-bedroom-villa-for-sale-in-ao-nang-krabi-u5341937

 

The land

 

House design

 

 

On 6/2/2025 at 7:40 PM, donx said:

I realize you plan on building these houses one at a time so the price you expect to set for each house is likely to increase over time. Nevertheless, roughly how much do you expect to sell the houses for? According to your initial post, it appears that each house will have close to 1 rai of land. Who do you expect your customers to be?

 

I ask because my wife (Thai) and I plan on living in Krabi when I retire in the next 5 years and she wants to build a house with mountain views. Most of the villas I've seen for sale are built on relatively small plots of land. Your venture appears not to follow that approach which is refreshing.