Real Estate Taxes Slashed

[bendix]

It hasnt been publicly announced yet, but today the Thai cabinet approved a revised tax package which is designed to give the real estate industry a significant boost by cutting the taxes and fees paid on real estate transactions.

The new rulings - needing royal assent, and subject to being implemented at a yet to be decided date - can be summarised as follows:

1 The reduction of the Specific Business Tax for the sale of real property from 3% to 0.1% of the selling price or the official assessed price, whichever is higher. (the period for this package is one year from the effectiveness of the royal decree to implement this tax reduction);

2. The reduction of the Registration Fee for the registration of the "sale" of real property at the Land Office from 2% to 0.01% of the official assessed price for the sale of:

(i) land, building, or land with building according to the Land Subdivision for Sale law (กฎหมายจัดสรรที่ดิน);

(ii) condominium unit, detached house, townhouse or commercial building

(iii) office building or land with office building

3. the reduction of the Registration Fee for the registration of the "mortgage" of real property at the Land Office from 1% to 0.01% of the official assessed price for the mortgage of

(i) land, building, or land with building according to the Land Subdivision for Sale law (กฎหมายจัดสรรที่ดิน);

(ii) condominium unit, detached house, townhouse or commercial building.

Make of this what you will . .

[Naam]

Make of this what you will . .

a clear indication that those farangs who "illegally" own land and homes will deported after they were circumcised.

[jonniebkk]

Is this not just the re-introduction of RE industry incentives that expired a year or so ago?

My take on it...since the major provision has a one-year sunset provision...is that some cabinet members (and probably their godfather) have some large parcels of land or office buildings that they want to sell

Nice to be able to set your own tax rates (or practically eliminate them altogether).

[Dave the Dude]

Make of this what you will . .

a clear indication that those farangs who "illegally" own land and homes will deported after they were circumcised.

WOW! Do land registry/Immigration do that to!!

Too late, I'v already been done, hope im not deported cos of it

Dave

[quiksilva]

Good news!!

[spasticated]

Hi Im buying a second hand condo next week in Bangkok its 2 years old it will cost about 1.35 million baht does this now mean I wont have to pay about 2% tax when I buy this but 0.01%? I was planning on having to pay about 70,000 baht in tax to change the name over to me. I saw there was some law about selling condos less than 5 years old having a higher tax on them.

Any advice on this greatly appreciated and thanks to Bendix for picking up on this even if it doesnt apply to me .

[bendix]

Can't say for sure, spasticated, because it's not clear when the new rulings become effective.

I'd say it's unlikely you'll benefit if you're settling the deal in the next couple of weeks though.

[John 1]

Read the BKK post on the 4th and 5th Mar there is a article on this subject it looks like it might start on the 1st April. As for tax on housing you only pay if you hold it for less than 5 years.

[spasticated]

<br />Can't say for sure, spasticated, because it's not clear when the new rulings become effective.<br /><br />I'd say it's unlikely you'll benefit if you're settling the deal in the next couple of weeks though.<br />

<br /><br /><br />

Hi thats not really a problem as after speaking with the owner we will delay until it goes thru, he has had a deposit and says thats fine by him we can just wait, however I do note that this condo is only 2 years old and I did read about the 5 year old rule before?????

So anyone know? think I will have to pay? hopefully not.

Thanks

[kdbkk]

<br />Can't say for sure, spasticated, because it's not clear when the new rulings become effective.<br /><br />I'd say it's unlikely you'll benefit if you're settling the deal in the next couple of weeks though.<br />

<br /><br /><br />

Hi thats not really a problem as after speaking with the owner we will delay until it goes thru, he has had a deposit and says thats fine by him we can just wait, however I do note that this condo is only 2 years old and I did read about the 5 year old rule before?????

So anyone know? think I will have to pay? hopefully not.

Thanks

It's called special business tax which required the seller to pay not the buyer, just like capital gain tax in the West. It will also be reduced to 0.01%, the same rate as transfer fee if it becomes effective.

[spasticated]

Thanks, we had already agreed with the seller "WE" would pay all taxes as the price was already quite good ie normally 1.6million baht per unit but we got it for 1.35+ we pay all taxes involved, this was the deal we agreed so a bit of a bonus now for us etc.

[cliffly]

My Bank told me about this yesterday.

Does this mean that the ruling will come into effect, say April 1st but we won't benefit for 12 Months ?

I am abit unclear of the 12 Months thing.

I am going through the process right now of selling land and buying a house which should all go through in April so would I benefit from this new rule if they implement it April 1st or would it not actually come into effect for 12 Months, therefore meaning I would not benefit ?

Thanks in advance of any explanation

Potentially

[quiksilva]

My contacts have told me that it might take another 3 months before this is implemented. One it is actually implemented as law (requiring Royal assent) it would last for a duration of 12 months.

If anyone else has information on when it might actually come into effect, please share.

[yabaaaa]

Was this extended recently and to what dates?

[mark5335]

Was this extended recently and to what dates?

It has been formally extended to end-March 2010.

[chickencurry]

Forgive my ignorance on this subject, but could you please clarify, did these changes in the taxes actually take place? Or does it mean that the changes won't take place until March 2010?

[mark5335]

The reduced taxes on property transfer & mortgage registration has been in place since about March 2008, and is currently due to expire on 28 March 2010.

(You can check the details at the website of ThaiVisa forum sponsor...thailandawonline.com)

[yabaaaa]

bought land last week pranburi paid full taxes

[chickencurry]

The reduced taxes on property transfer & mortgage registration has been in place since about March 2008, and is currently due to expire on 28 March 2010.

(You can check the details at the website of ThaiVisa forum sponsor...thailandawonline.com)

Thanks very much for that Mark. I looked at TV sponsor website www.thailandlawonline.com and found a page with details on taxes applicable for transferring properties here link to sponsor page re taxes Lots of detail, good website.

[JAS21]

The reduced taxes on property transfer & mortgage registration has been in place since about March 2008, and is currently due to expire on 28 March 2010.

(You can check the details at the website of ThaiVisa forum sponsor...thailandawonline.com)

Thanks very much for that Mark. I looked at TV sponsor website www.thailandlawonline.com and found a page with details on taxes applicable for transferring properties here link to sponsor page re taxes Lots of detail, good website.

My wife talked to lawyer today and he was pretty clear that the Registration fee on private sales remained at 2% but on company sales it was reduced to 0.01% if that is any help. Tax also is 2% and Stamp Duty 0.5%.

[chickencurry]

Well that's interesting John but not what the sponsor website says. Wonder who is correct.

[mark5335]

I've transferred 2 condo's this year in Bangkok and I paid the reduced tax rates. Both properties were purchased in individual names.

However, during the 3rd quarter of last year I transfered a condo in Petchaburi province and my dumb-ass lawyer didn't know about the concessional rates, and the developer was requesting payment of the full rates at transfer. Both parties then seemed either oblivious or uninformed about the reduced rates in place since the end of the 1st quarter of 2008 (or they were trying to rip-off the naive farang & pocket the difference). Needless to say, I didn't agree to the transfer until they amended to the settlement statement to the correct level of reduced tax rates.

[dave111223]

Does anyone know where one could obtain a formal copy of this tax reduction? In case one runs into the above uninformed types that Mark mentioned it might be helpful to have a printed out copy of the law.

[oracle]

Well that's interesting John but not what the sponsor website says. Wonder who is correct.

If you read the sponsor website it says that transfer fees are reduced for specific immovable properties. They did only not specify the term specific properties like office buildings or land together with an office building, or condominium unit, or properties in an official property developments etc. In case of private land sale the transfer fees are still 2%. So both are correct

[chickencurry]

Sorry Oracle, I'm struggling to understand what you are saying. In my case, I am selling a property (not the land). Does that count as reduced rate?

[oracle]

Sorry Oracle, I'm struggling to understand what you are saying. In my case, I am selling a property (not the land). Does that count as reduced rate?

What's difficult to understand? What I know, for what it's worth, specific business tax is reduced for all real estate transaction, transfer fees are reduced for certain real estate property transfers. Depending on the property that is transferred the transfer fees may be reduced or not.

[jjonz]

This is all another 'tinkering' to boost the property market isn't it? If they're concerned with the mainly domestic market, ie Thais selling to Thais, well good luck and all well and good, but the Thais are hurting financially the same as everyone else in the world, except perhaps the Australians.

If their intention is to boost the decidedly moribund 'farang' market, a simple adjustment of the paltry 30 year lease to a more sustainable and globally equitable 90 year one, would all that would be needed, surely?

[MJo]

Confusing reports...

I'm in the process of completing property purchase and found what i believe to be the truth from the net. Simple google job really.

So for Transfer fees Price Waterhouse Coopers is reporting reduction of the transfer fees to 0.01% effective until 28th of March 2010.

See PWC Pages

For the Special Business Tax (SBT) there was Royal Degree No. 488, published in Royal Gazette on 18th of May 2009 which extends the discount from 3% to 0.1% (or from 3.3% to 0.11% inclusive of 10% municipality tax) until 28th of March 2010.

See PWC Pages

and

See Revenue Department Pages

For those who sold property between 29th of March 2009 and 18th of May 2009 and paid full SBT can claim it back by filing Kor 10 form with the Area Revenue Office. One could assume you can claim also in the case they made you pay full SBT after the 18th May degree.

For those who bought property and paid full SBT there is little to be done even if you paid the tax on behalf of seller. It will be returned to the seller as he was taxed regardless who provided the funds for it.

[MJo]

For boosting property market, i end up now paying 6K taxes and transfer fees instead of 255K if full rates would apply. So without the reduction in rates this deal would have not happened.