Cash For Condo

[Sleesy]

Dear All,

I have cash from previous (fully tax paid) company business deals in Thailand.

I'd like to buy a condo with this cash....

BUT I'm thinking I'll have to send the cash abroad

and then send it back to Thailand in a foreign currency

to get the relevant Foreign Exchange Transaction form and purchase the condo....

Any alternatives ?

Best Regards

Sleesy

[InterestedObserver]

Not unless you are a permanent resident or the cash happens to be in a foreign currency account..

[Raptor7]

of if the condo is owned by a foreign holding company (like ones established in the Cayman Islands, BVIs, Mauritius, Bermuda, etc.) and you buy the shares of that holding company (that means a remittance of Baht out, but not back in)...

a friend of mine did that (but just used US Dollars already outside Thailand to buy the shares---so no need to use Thai Baht)...

[ThaiBob]

I see your options as follows since you do not want to wire money out of Thailand and then back in a foreign currency:

1. Get advances against credit cards and deposit directly to your Thai bank account. Withdraw the money. The Thai bank can then issue a Taw Taa Sam (3) or FETF. Deposit the money again and wire back to your home country.

2. Have a friend or family member wire you the money to your Thai bank account and then follow the steps in #1.

Depending on how much money you need these options may not work for you. There is also the time and cost of wiring money back and forth. Wiring money to yourself when in Thailand can also be difficult unless you have a special arrangement with your home bank.

There is a third option. Go to a money changer. They will issue you a FEFT at a cost. I had a shortfall on a condo purchase of over 1M baht. For about 6,000 baht I had a FEFT within a day. You must provide your sales contract and a copy of your passport. PM me if you need details.

[PattayaParent]

You only need the FETF for th declared value of the condo, not the actual purchase price.

So you would only need to wire out and back in a portion of the money and make up the remainder with what's already in your Thai bank.

[Sleesy]

Thanks for tips Gents...

Here's an option from a Thai Solicitor who I respect ....

open a US currency non-resident bank account with a foreign bank in Bangkok such as HSBC, Standard Chartered. Then, you find a way to move your cash into that non-resident bank account and then withdraw it with a purpose to buy [ ] condominium. Please get a letter from the bank to confirm about the purpose of withdrawal.

But it's a 5 Million purchase so I'll lost 100k in when changing currencies and back ...

[PattayaParent]

^if it's an older condo, say 5-10 years old then probably the land department valuation of it is only 2~3 million so you only have to transfer out and back in, that amount.

Ask the seller what value will be declared at the land ofice for the sale.

Edit: even if it's a new development just completed, ask the developer what the land office valuation will be, it may possibly be less than you are paying as the land department do not include the value of furnitures and fittings, and you may have had some extras put in over and above the 'base' price.

Edited February 19, 2010 by PattayaParent

[Barack]

Dear OP,

Please let us know which path you decided to take and how everything worked out for you. There are others who are in similar situation and would like to know too. Thanks!

[Sleesy]

I intend to declare at purchase price otherwise wont there be Income Tax issues when I sell ?

You only need the FETF for th declared value of the condo, not the actual purchase price.

So you would only need to wire out and back in a portion of the money and make up the remainder with what's already in your Thai bank.

[PattayaParent]

I intend to declare at purchase price otherwise wont there be Income Tax issues when I sell ?

You only need the FETF for th declared value of the condo, not the actual purchase price.

So you would only need to wire out and back in a portion of the money and make up the remainder with what's already in your Thai bank.

It's usually not up to you to declare the price as the seller pays the tax.

There'll be no income tax problems when you sell.

Edited February 20, 2010 by PattayaParent

[trajan]

no income tax problems?!....sorry dont understand that comment ......if I have to pay income tax on the transaction, that a problem by definition ....

anyway, dont forget that income taxes DO apply when selling a condo....(but the income tax is not based on capital gains.... for an individual seller, the income tax is based on government assessed value, length of time of owning the condo and the progressive % rates of personal income tax here in Thailand)...here's a summary from my own experience:

A. VALUES

there are two values to keep in mind when selling/buying a condo...the official govt assessed value (OGAV) and the seller's and buyer's declared sale and purchase price (DSPP).

usually people declare a DSPP higher than the OGAV when selling & buying a condo, but that's not always the case...

B. GOVERNMENT FEES & TAXES applied at closing at the Land Office when selling & buying a condo (currently temporarily reduced until March 28, 2010)

1. Government Transfer Fee of 0.01% of the OGAV (after March 28, the normal 2% would apply)

2. Specific Business Tax (SBT) of 0.11% of the higher of the OGAV or the DSPP (after March 28, the normal 3.3% would apply).

[NOTE: if an individual owner/seller owned the condo for more than 5 yrs or 1 year (in the case of seller being registered in the tabien baan/household registry book for that condo) then SBT would not apply, BUT in that case stamp duty would apply.]

3. Stamp duty/tax (IF SBT is not paid). Stamp duty of 0.5% of the higher of the OGAV or the DSPP

4. Thai Income Tax (for an individual seller, income tax is payable according to a calculation based on OGAV and length of time of owning the condo, not on declared sales profits/capital gains)

5. if applicable, real estate broker commissions (commonly about 3% on actual sales/purchase price) but, in my experience negotiable with the broker prior to finding a buyer.

//

[trajan]

It's usually not up to you to declare the price as the seller pays the tax.

There'll be no income tax problems when you sell.

(a) the seller and the buyer together declare the sales/purchase price by signing the government form sales and purchase agreement....

(b ) there are income taxes payable (see post above)

[Sleesy]

Quick update...

My solicitor advised me to ask Bank of Ayudhya to re-issue the FETF with reason changed to Condo Purchased.

I've asked the local bank, they rang Bangkok, Bangkok rang me back the next day and said it could be done once they see the sales contract....

[PattayaParent]

It's usually not up to you to declare the price as the seller pays the tax.

There'll be no income tax problems when you sell.

(a) the seller and the buyer together declare the sales/purchase price by signing the government form sales and purchase agreement....

(b ) there are income taxes payable (see post above)

So you have a work permit to sell condos do you???

[trajan]

It's usually not up to you to declare the price as the seller pays the tax.

There'll be no income tax problems when you sell.

(a) the seller and the buyer together declare the sales/purchase price by signing the government form sales and purchase agreement....

(b ) there are income taxes payable (see post above)

So you have a work permit to sell condos do you???

completely irrelevant......you dont need a work permit to sell your own condo....

(by the way, since you are so interested, I have a work permit for my job (not related to selling condos) and a permanent residence permit but that is besides the point)

[PattayaParent]

^but you don't have to pay income tax if you're not working, and if you're working you need a work permit.

So completely relevent.

[trajan]

^but you don't have to pay income tax if you're not working, and if you're working you need a work permit.

So completely relevent.

wow, WRONG!!

(in a condo sales transaction it does NOT matter if you hold a work permit or not, the withholding tax still applies......if you sell a condo (as a Thai, foreigner just visiting Thailand or foreigner with a work permit and/or PR certificate) you must pay tax (and to ensure you do, they just withhold it at the closing at the Land Office when you transfer the condo title deed)

if you are a foreign seller of a condo (and you do or do not have a work permit)....the income tax withholding still applies based on the selling value and length of time of ownership....the formula is a bit involved. ..here's one explanation of the formula...

http://www.doingbusinessthailand.com/thail...calculated.html

[PattayaParent]

^here's where I think you're getting confused

CAPITAL GAINS

Capital gains derived from the sale of immovable property are taxed at the standard income tax rates. The capital gains can either be included in the aggregate income or taxed separately.

http://www.globalpropertyguide.com/Asia/Th...Taxes-and-Costs

You are paying CGT, not Income Tax.

[trajan]

ahh, so you are wrong on the work permit issue, so now want to argue side issues....

but even on the side issue, wrong again....it is not a capital gains tax...its an income tax.....you still need to pay the income tax even if you realized a loss on the transaction...

the income tax for an individual is calculated based on government assessed value of the condo unit (and length of time of ownership).....

I think you will understand if you sell your own condo unit and study the taxes and fees involved....

[PattayaParent]

ahh, so you are wrong on the work permit issue, so now want to argue side issues....

but even on the side issue, wrong again....it is not a capital gains tax...its an income tax.....you still need to pay the income tax even if you realized a loss on the transaction...

the income tax for an individual is calculated based on government assessed value of the condo unit (and length of time of ownership).....

I think you will understand if you sell your own condo unit and study the taxes and fees involved....

Have sold a condo and the Land Office did not ask for, or give me, an income tax number to record the income tax that I didn't pay.

Read the link I provided and you will see that it is a CGT taxed at the standard income tax rates. The capital gains can either be included in the aggregate income or taxed separately.

So I can understand your confusion.

ahh, so you are wrong on the work permit issue,

QUOTE (PattayaParent @ 2010-02-24 12:45:53) and if you're working you need a work permit.

So are you saying you don't need a work permit to work?

[trajan]

Have sold a condo and the Land Office did not ask for, or give me, an income tax number to record the income tax that I didn't pay.

Read the link I provided and you will see that it is a CGT taxed at the standard income tax rates. The capital gains can either be included in the aggregate income or taxed separately.

So I can understand your confusion.

It appears that you are the one confused....

You do not need a work permit or a tax payer number in order to pay the income tax withholding. As a seller of a condo, the income tax withholding amount is payble at the time of closing. The income tax withheld amount is based on a formula, taking into account the government assessed value of the unit and the length of time of ownership.

It is not a capital gains tax (as the tax is payable even if you realized a loss, i.e., sold at less then you bought).

I will not comment further on this as its pointless....believe whatever you want....ignorance is bliss

So are you saying you don't need a work permit to work?

I wont even comment on this as your question is ridiculous....

[donx]

Have sold a condo and the Land Office did not ask for, or give me, an income tax number to record the income tax that I didn't pay.

Read the link I provided and you will see that it is a CGT taxed at the standard income tax rates. The capital gains can either be included in the aggregate income or taxed separately.

So I can understand your confusion.

It appears that you are the one confused....

You do not need a work permit or a tax payer number in order to pay the income tax withholding. As a seller of a condo, the income tax withholding amount is payble at the time of closing. The income tax withheld amount is based on a formula, taking into account the government assessed value of the unit and the length of time of ownership.

It is not a capital gains tax (as the tax is payable even if you realized a loss, i.e., sold at less then you bought).

I will not comment further on this as its pointless....believe whatever you want....ignorance is bliss

So are you saying you don't need a work permit to work?

I wont even comment on this as your question is ridiculous....

I don't know if it is more properly called a capital gains tax (even when there is a loss not a gain) or if it is called an income tax (even if the property lost value and therefore no income was received). To me it doesn't matter. It seems that neither of these definitions fit. Nevertheless you are both talking about the same tax.

[pkrv]

Hi donx i would have put in a comma between your last two words

Nevertheless you are both talking about the same, tax.

PKRV

edit forgot the full stop

Edited February 26, 2010 by pkrv

[PattayaParent]

I will not comment further on this as its pointless....believe whatever you want....ignorance is bliss

Certainly true in your case as it is quite clearly stated that it is a CGT tax applied at PIT rates.

Which is why I say I can understand your confusion. (nobody makes a loss on property in LOS)

[trajan]

for the sake of clarity for readers, I have to reply since a certain poster insists on posting obfuscating information:

(a ) if an individual seller sells a condo, one of the taxes imposed is a withholding tax on income (with the level of deductions on the assessed value of the condo based on length of time of ownership and income tax calculated at progressive rates)

(b ) such withholding tax applies even if the the actual sales price is lower than the cost basis in the condo (i.e, it is not a tax based on capital gain)

(c ) if that individual seller is a foreigner, it does not matter if that person has a work permit and/or personal taxpayer number, the withholding tax will still apply (however, if that person actually files annual personal income tax returns in Thailand, he/she has the option to either accept the imposed income tax withholding on the condo sales transaction as is, or integrate the transaction into overall income, deductions)

(d ) here is a very good summary of the fees and taxes involved (including the withholding tax)...Siam Expat Summary

(Im especially focused on this as Im selling another of my condos before the March 28th deadline when transfer fees go back up to 2% and SBT/local tax goes back up to 3.3%)

[Sleesy]

Well it was quite simply really, my Foreign Exchange Transaction forms said "Investment"

My solicitor just asked me to request the bank to re-issue them stating "For purchase of Condominium in the name or Mr SLeesy"

I have, they re-issued them and my solicitors says once he gets the originals we can complete the purchase ...

[huawei]

Is it possible to have Foreign Exchange Transaction forms up to the amount of the appraised/declared value for the land office and use Thai baht as the balance.

Transfer fees etc are based on the declared value so why is there a need to have the full amount in FETF, as the land office is only concerned with the appraised value.

Purchase ( contract price) 9 m

Declared Vaue 6m

Thanks.

[PattayaParent]

^you only need the FETF for the declared value and only have to show evidence of payment to the seller in that value at the land office, the excess should be covered by a separate cheque.