Increased Transfer Tax..?

[paulbrun]

Can anyone tell me, for sure, when the increased rate of property transfer tax is due to start, or if already started, when it came into effect, and when the increase was announced to the public..? I have just bought a property, and have been informed that the transfer tax will now cost me almost double what it did a few months ago. I have a contract, but unfortunately, it clearly states that the cost of the taxes are 'shared' betweeen the buyer and the seller.

[johnnyk]

Tell us more, first I've heard of it.

[paulbrun]

Tell us more, first I've heard of it.

There is a sliding scale of tax imposed on every property bought, or sold. I can't tell you the exact rate, but in our case it seems to have been about 4% originally..? The amount of tax paid can be reduced by changing the value of the property, and declaring a lesser amount for the sale / purchase. This is common practice. But the Thai government seems to have wised up to this, and are now assesssing the value themselves. The tax burden is usually shared by both buyer and seller, as in our case, at 50% each. However, after our contract was drawn up, and we made the final payment, the government raised the amount of tax to be paid on the sale of a property, and we are now being asked to cough up 50% of the increase. It has almost doubled the amount of tax we have to pay, and could easily have been avoided, had someone advised us that the rate was going up. In fact, we were told that NEXT YEAR, the rate would change, and the government were going to toughen up on the low valuations given for more expensive properties. But it appears they have caught us all out, by introducing it earlier, on November 1st apparently..? It stinnks, but there's nothing much we can do, except add this cost onto the sale price, if and when we decide to move.

[PattayaParent]

Could it be that the seller had owned he property for less than 5 years?

In that case the tax does indeed work out as double as you have to pay the Transfer Tax AND a Business Tax.

[johnnyk]

I knew about the transfer tax ("welcome tax" in Canada) but had not heard anything about it doubling.

Could well be that its for properties owned for less than 5 years.

[Irene]

There is no increase in transfer tax of property. 2% is still applicable.

The 5 year ownership has nothing to do with a buyer. It is the condition applied to a seller to determine whether he could be construed as a trader of property.

[paulbrun]

The property in question is over 10 years old, and has been owned by the original developer for the duration of that time. He has sold it to me and the transfer tax that was applied was indeed 2%, as you state, Irene. (my math is a little suspect..?) But now, since Nov 1st 2007, the assessment of a property's value is decided by the Land Dept., and mine has been determined as being much higher than that stated, and the amount of tax has increased by almost 100%..! Had I known about this change in poilicy, regarding the valuation of a property, I would have concluded our sale a few days earlier, and saved myself a large sum of money. I guess it's just another lesson learned, the hard way..?

[quiksilva]

Yes this is partly true, transfer fees and other property sales taxes levied by the government have always used either the government's assessed value or the transaction price, whichever is higher. However, they have recently revised their valuation methodology and in some cases this has resulted in higher land valuations.

The official line,was that the old method was quite inaccurate and did not always fairly reflect true open market value. This has a grain of truth to it, but it may well also result in increased tax revenue.

[groper]

There is no increase in transfer tax of property. 2% is still applicable.

We have just been told 5% a the local Land Registry Office in Sansai, Chiangmai.

Things are changing...

Edited November 30, 2007 by groper

[jaideeguy]

So, I've read 1, 2, 4, and now 5% on transfering property. In my case it will be a condo, owned less than 5 yrs and i have a possible buyer and would like to find out how much to tell buyer it will cost. will check with my lawyer tomorrow and report back on this thread.

[LivinLOS]

I know phukets transfer tax is set to really boots Jan 1st and people are discussing it to move property fast in that time.

I dont know if its a fact but one guy said it was to go from 3% to 10% !!! Thats assessed land values and he said they tend to farang prices assessed values if a whitey is obviously in the sale.

The above is word of mouth and hence liable to be inaccurate but there was also a piece in one of the Gazettes recently about this.

[jaideeguy]

Just did a quick phone consult with my lawyer and she informed me that the transfer fees and taxes for condo owned less than 5 yrs average around 7.8%....i said WOW!!!

[John 1]

The seller pays the business tax if owned less than 5 years it's 5%.

The buyer and seller normally shares the transfer tax of 2.? %.

[jackr]

Transfer Tax is still currently 2%. Business Tax is 3%.

In the process of buying a house off the bank and I've agreed to just pay the TT which is defo 2%. Have been informed by said bank that it will be going up next year. Could be a subtle marketing ploy but they know I want it now so no need...

[jackr]

Transfer Tax is still currently 2%. Business Tax is 3%.

In the process of buying a house off the bank and I've agreed to just pay the TT which is defo 2%. Have been informed by said bank that it will be going up next year. Could be a subtle marketing ploy but they know I want it now so no need...

Bank (SCB) still reckons the tax is going up from Jan1. Any info Sunbelt?

[ThaiLawOnline]

Property taxes are normally ajusted every 4 years in Thailand.

The last time it was done, it was 4 years ago... so, everybody is expecting them to raise on January first.

We do have very good connections at the Land department in Korat, and so far, nobody knows the EXACT rate that it will be after

January first. Some of the project developers around Korat are expecting them to be much higher and next week, we have to transfer much more houses and land than usual.

You can see the actual tax rate here and it's ending in 2550 (this year):

http://www.treasury.go.th/template.php?sel...ssess_build.htm

Beside number 1, it's Bangkok in Thai.

Beside number 5, it's Nakhorn Ratchasima (Korat) also in Thai, where I live...

Taxes are also different for houses, townhouse, house in made of wood, one storey, two storeys....

Try not to think too much about taxes if you want some happy holidays!

Sebastian.

[BL4u]

I've never seen land transferred to a foreigner, besides through a front company. It is not really relevant for foreigners, but for the info an aricle from the Bangkok Post dated February 10 2007;

New land valuations to be announced starting next year will be based on market price data as well as projections of economic growth and inflation rates.

The goal is to ensure that values represent as closely as possible actual market conditions, according to Amnuay Preemanawong, the deputy director-general of the Treasury Department.

Land valuations set by the Treasury Department and the Land Department are used as a baseline not only for market transactions, but also for tax purposes and collateral assessments by local financial institutions.

Valuations are revised every four years on a nationwide basis, with the newest values to take effect from 2008 through 2011.

The Treasury Department, which manages public lands on behalf of the government, is responsible for carrying out the valuation survey.

For the new survey, the department has split its work into three phases.

First it will revise values for land plots that are already in state databases, based on the most recent transaction data for nearby properties as well as economic data over the previous three years.

Second, it will assign valuations for 400,000 plots for the first time, mostly representing sites in Surin, Chiang Rai and Buri Ram provinces. The third phase will involve assessing values based on wholesale blocks.

Ultimately, the department hopes to compile a nationwide database with price and geographic information both for individual plots as well as broader blocks.

The initial survey is expected to be completed in July, after which the department will meet with provincial working groups to finalise the data starting from August.

Mr Amnuay said the new valuations would not necessarily result in increases in all jurisdictions, particularly in provincial areas.

The department tracks 28 million land plots nationwide, of which two million are located in Bangkok.

All land in Bangkok has already been classified on a plot basis, whereas most provinces still have valuations based on block zones.

Valuations in some areas, such as Silom and Yaowarat roads in Bangkok , typically post little change from one survey to the next, due in part to the relatively few transactions registered in the market.

As a result, official valuations in some of the most valuable areas of Bangkok are listed at around 600,000 baht per square wah, even though private valuers would assign values of up to one million baht for the same plot.

For areas with relatively few market transactions to serve as a baseline, the Treasury Department will turn to other indices to assess land values, such as rental and lease rates for an area and values attached to similar plots in the area.

Under the current valuation schedule, first used in 2004 and set to expire this year, the highest values have been assigned to properties along Silom Road , at 340,000 to 600,000 baht per square wah.

Yaowarat Road in Chinatown is valued at 260,000 to 510,000 baht per square wah, and Thaniya Road off Rama IV is valued at 340,000 to 510,000 baht.

The public can obtain information on the valuation process, including data for individual plots, on the Treasury Department website:

http://www.treasury.go.th

[Irene]

Can anyone tell me, for sure, when the increased rate of property transfer tax is due to start, or if already started, when it came into effect, and when the increase was announced to the public..? I have just bought a property, and have been informed that the transfer tax will now cost me almost double what it did a few months ago. I have a contract, but unfortunately, it clearly states that the cost of the taxes are 'shared' betweeen the buyer and the seller.

To put the matter in the right perspective, the question was asked on THE RATE OF TRANSFER TAX.

The answer in my book is "no increase" and never heard of the prospect of an increase. However, it has been known for many months that as from January 2008, the official value for land price used by the Land Department as a benchmark has been on the line of a big increase. This value is to measure your actual deal whether the sale value as declared for registration with the Land Department is lower or higher than the official value. If it is higher, then your higher value shall be used to calculate the transfer tax at 2%. But if your sale value is lower than the official value, then the official value shall be used.

[misterme]

Yesterday I transfered the chanote on the condo I purchased to my name.

Purchase price 1,050,000

Assessed value 880,000

Costs split between me and the seller... was about 57,000. My share was 1/2 of that.

[pkrv]

Just about to transfer at The Park (25th Dec) Transfer fee is 2% of which we pay 1/2 (1%).