Selling House And Land-Taxes Etc

[timekeeper]

i have a house on land in the Thai family name

the date on the chanote says 30 November 2050

the house book says 25 January 2051

this year is 2055

in November will i have had it five years

so the question is if i sell am i liable for taxes on the sale

i heard that before 5 years it is 3 + % and after 5 years no taxes are due

is that true ?

i went to the land office today but could not get a definitive answer

any one know?

thank you

[ballbreaker]

Below is list of taxes due at land office at time of transfer.

Transfer fee - 2% of assessed value.

Stamp duty - 0.5% of sale price. Paid only if owned over 5 years.

Special Business Tax - 3.3% of sale price. Paid only if owned less than 5 years.

Withholding Tax - progressive rate on assessed value.

[breadbin]

The only taxes that are to be paid if the land has been registered for 5 years as you say will be:-

Transfer fee

2% of the registered value of the property

Stamp Duty

Withholding tax

1% of the appraised value of the property

If the land is registered for less than 5 years then you pay 3.3% business tax but do not pay the 0.5% stamp duty.

So, for example is the house was sold at 5 million, you'd pay

2% transfer fee (of the registered value) = 100,000bt

0.5% stamp duty = 25,000bt

1% of appraised value - e.g 50,000bt (if 5 million but usually less than value of land/house).

So, if sold at 5 million the taxes would be 175,000bt (if land registered 5 years +).

All easy, was the same when I sold my condo in Bangkok a little while back.

Usually buyer and seller agree who pays what.

0.5% of registered value. Only payable if exempt from business tax

[breadbin]

Further, read a little quick! The 5 year period starts from land registration and not house book registration as it could be argued that the house was empty for years and not registered!

Good luck, let us know how things pan out.

[timekeeper]

thank you very kindly for all your help and advise

i found it very helpful

on the same note can someone help me decipher the meaning of this statement regarding the tax on the asset please?

''If the seller is an individual (not a company) Specific Business Tax does not have to be paid if:

• The seller has possessed the property more than five years before the transfer (the transferred real property has been used as the principal place of residence, and the seller’s name appeared in the house register for not less than one year from the date of acquiring such property).''
  

what's the house register? and would my Thai family's name be on this register? and if so where would this register be found?

does it mean that if the family has not used the house as a principal residence then they would become liable for the tax payment upon sale?

also if the house had been rented out for those five years rather than actually living in it themselves would that make them liable for the tax to be paid?

as a side question, if it became known that they had rented it out for the qualifying period then would they become liable for tax on the income received from it?

Edited September 19, 2012 by timekeeper

[Monkeypants]

whats the house register

I think it refers to the Tabien Bahn, commonly known as the Blue house book

[breadbin]

The house register is the blue book. If in a Thai name you will have this and as a farang, as I think you are you probably are, you (maybe) have a yellow book too.

The blue book would have all members of the family that live in the house if you are the actual owner and Thai, I suppose, as I am English, is it like being registered at my local council office and them providing me with a book, little different here I know.

As to the tax situation, as I mentioned in an earlier post, the title deed will state a date on it that the land was registered, if you own the land from this date for 5 years then the 3.3% business tax is not due but a tax of 0.5% replaces it so it saves you in effect 2.6%.

In respect of rental income, if you rent out your property and it is declared then maybe a small tax would need to be paid, this would depend on the rent received less any maintenance such as gardener, tap broken etc. which would all be deducted. Let's just say that receipts can be borne in Thailand for most anything (I am sure you wold agree) and so income tax would become negligible. This is something I faced when selling the condo, it was rented for a period but receipts showed no real income as maintenance was always ongoing, my lawyer confirmed all was fine. Then again, i know people who never declare and no issues there either. Also this is the vendors concern and down to them, nothing to do with a buyer.

As per my earlier post, the only taxes to pay will be the 3 smaller percentages, i.e. not the larger business tax.

Have you sold in Thailand purchased / sold in Thai before? It really is a simple process.

Find a buyer, sign a pre-sales contract, I stipulated a non refundable 10% deposit, this was paid to me, agree a transfer date, i used a Bangkok lawyer to sort out the transfer paperwork, met at the land office, lawyer went also, met buyer, only needed title deed, wifes ID card (condo in her name) and blue house book, all sorted in 2 hours, buyer then went to bank to transfer balance of payment.

Very easy indeed. My mate is selling a small house at present, he has a buyer for his 2 bed house (wifes name) and using a Thai lawyer now. All easy, deposit paid, and awaiting to make the final transfer.

Good luck.

I hope the above assists you.

[breadbin]

Has the passage at the end of the reply sent to me when I sold in BKK, sorry couldn't find it the other day. It may help.

Also thinking about the tax question you have, who ever has their name in the blue house book, i.e the Thai name, if they have had their name there for a year or more then again no business tax of 3.3% is due.

You then mention about renting, my answer to this is if the seller does not declare that the house was rented, who will find out? In the UK, if you rent a house you are liable to pay tax on the profit you make, I assume same as Thai but again same as Thai if you do not declare it, it will be almost impossible, if not wholly impossible to trace the past owner as records are not as they are in the UK, This can be backed up by many Thai's not paying income tax, who chases them?

My advice is that if you have rented a property out and not been asked for tax do not declare it. If you are a buyer then this is not or ever will be your problem so why worry about it.

Specific Business Tax is a tax applicable on property sale/transfer fixed at a rate of 3% on the higher value between the declared purchase price and the appraised value (Whichever is higher), plus a local tax of 10% on the specific business tax, bringing the total tax to 3.3%. The sale/transfer is not subject to the specific business tax if;

1. Selling property by an individual who has acquired the property for more than 5 years.

2. Selling property to the government under the expropriation law.

3. Selling inherited property.

4. Selling property by an individual who has his name recorded in the house registration book for not less than 1 year.

5. Transferring property as gift to a child but exclude adopted child.

6. Transferring property by inheritance to heirs.

7. Transferring property as gift to the government.

8. Exchange property with the government’s property.

[breadbin]

what's the house register? and would my Thai family's name be on this register? and if so where would this register be found?

Unless your Thai family specifically put their names in the blue book, the house register then it will not be there.

This is only usually for Thai family who are registered there, if you have a yellow book, you will be registered there.

Do you own this house or rent? If your Thai family own it, their names will (should) be on the blue book. If it is an old house or old family there maybe many names on it. If you have a Thai wife, she may be able to explain about her ID card which would probably be registered at her family home (if she lives away). If you rent then you may have a yellow book where all residents names are recorded (Thai and farang).

[breadbin]

I have have gone through all emails of when I sold my condo, I can add nothing more.

My mate is selling his 2 bed house in Pattaya and so if he experiences anything unusual I'll post here but should be easy.

Good luck

[timekeeper]

thank you for the time and effort you have put into responding to my plea Breadbin

the information you have given is very, very useful and relevent

thank you

[breadbin]

no problems, I am an estate agent in London so kid of like property, been doing it 25 years!

Buying & selling in Thai was a good experience.

[kleenexboy]

Specific Business Tax is a tax applicable on property sale/transfer fixed at a rate of 3% on the higher value between the declared purchase price and the appraised value (Whichever is higher), plus a local tax of 10% on the specific business tax, bringing the total tax to 3.3%. The sale/transfer is not subject to the specific business tax if;

1. Selling property by an individual who has acquired the property for more than 5 years.

2. Selling property to the government under the expropriation law.

3. Selling inherited property.

4. Selling property by an individual who has his name recorded in the house registration book for not less than 1 year.

5. Transferring property as gift to a child but exclude adopted child.

6. Transferring property by inheritance to heirs.

7. Transferring property as gift to the government.

8. Exchange property with the government’s property.

Man... it does not get more confusing...

So what happens if seller;

(1) has own the land for Less than 5 years,

(4) been on house blue book for More than 1 year.

Clause (1) say you have to pay because Less then 5 years.

Clause (4) say you do not have to pay because registered more than 1 year.

So what happens in the above situation?

[Rowdy100]

HI - really good topic this one.. lots of useful information - Breadbin - was just wondering... I purchased a condo in Suk. two years back and all was done through a reputable law firm etc.. All no worries and all easy enough... my question for you is... who is supposed to provide this "blue book and/or yellow book" that you mention... I have recceived all papers from lawyers etc... but I have not seen a "blue/yellow book"... I was asked this recently by a potential insurer and in my current naievty had no idea what they were talking about...!

Was hopeful to get a bit of a "heads up" on this if possible..??

Cheers

[breadbin]

Hello Rowdy

The Blue book will only be (I think I am correct in saying) to a Thai national whop owns a property. if you are non- Thai then you can get a yellow book as proof of residency etc.

Do you live in BKK? If so, you will need to apply to your local office. Others here may be able to provide a list of what docs you need to get it, I know there was a thread on this so a search may assist you.

I think it takes a little time and effort to get one but again beleive that you may need it to register vehicles etc.

All i know about this really is that yellow is for farangs!

I also have knowledge on the selling procedure and the 5 year rule!

Good luck mate.

[Rowdy100]

OK - Cheers and thanks for replying - I "live" in Bangkok sometimes - currently contracted for work in India...from what I can gather this yellow book is only for permanent residents or retirees... which I'm not.. yet..

so I guess I'll just keep reading and learning more as things roll on..

Many thanks for your input - enjoying Thai Visa info.

[sotsira]

The only taxes that are to be paid if the land has been registered for 5 years as you say will be:-

Transfer fee

2% of the registered value of the property

Stamp Duty

0.5% of registered value. Only payable if exempt from business tax

Withholding tax

1% of the appraised value of the property

If the land is registered for less than 5 years then you pay 3.3% business tax but do not pay the 0.5% stamp duty.

So, for example is the house was sold at 5 million, you'd pay

2% transfer fee (of the registered value) = 100,000bt

0.5% stamp duty = 25,000bt

1% of appraised value - e.g 50,000bt (if 5 million but usually less than value of land/house).

So, if sold at 5 million the taxes would be 175,000bt (if land registered 5 years +).

All easy, was the same when I sold my condo in Bangkok a little while back.

Usually buyer and seller agree who pays what.

Sorry to put a spanner in the works,

but i recently sold a condo earlier this year that i owned for 6 years.

My tax bill was calculated in 3 stages to reach the total.

All the calculations were based on the estimated value set by the land office,

not the sale price.

0.5%

2.0%

2.5%

These were in effect in Jan 2012

Edited September 20, 2012 by sotsira

[breadbin]

Soistra, you are correct, my calculations were just for an example.

I think I said somewhere that the Land Office valuations can (and usually) are less than the sales price.

But thanks for pointing that out.

[breadbin]

sorry, just to come back to you, what were the taxes you paid then as they are not correct.

The taxes are these:-

2% transfer fee (of the registered value) = price declared

0.5% stamp duty = price declared

1% of appraised value - land office value

They are 100% NOT what you state. If you paid, 0.5%, 2.0% & 2.5% I would say you need to get clarification of what you paid.

Many lawyers can confirm that the percentages I put up are correct, I never ever heard of your fees and so am interested to know exactly what they are. The 0.5% & 2.0% are correct but the 2.5 is not, that will either be 3.3% or 0.5% (depending on 5 year rule etc.).

What is the 2.5% please?

Never heard of it.

[theslime]

When I sold house/land no money was asked for by the local Land Office. About 3years ago.

[sotsira]

I was just pointing out that the total of the 3 taxes that i was charged

amounted to 5% of the estimated value of the property owned for over 5yrs.

0.5 + 2.0 + 2.5

I think they increased one of the taxes a little while ago.

[breadbin]

When I sold house/land no money was asked for by the local Land Office. About 3years ago.

Hello Theslime,

was this when the govt introduced a reduction to entice buyers back to the market?

Cheers

[sotsira]

The only one that differs from mine to yours is the

1% that you quote and the 2.5% that i was charged,

maybe this one has been increased lately, although this was in Jan 2012.

[breadbin]

not sure, i sold after Jan 2012 and paid what i said.

Interesting! very interesting!

[Sophon]

sorry, just to come back to you, what were the taxes you paid then as they are not correct.

The taxes are these:-

2% transfer fee (of the registered value) = price declared

0.5% stamp duty = price declared

1% of appraised value - land office value

They are 100% NOT what you state. If you paid, 0.5%, 2.0% & 2.5% I would say you need to get clarification of what you paid.

Many lawyers can confirm that the percentages I put up are correct, I never ever heard of your fees and so am interested to know exactly what they are. The 0.5% & 2.0% are correct but the 2.5 is not, that will either be 3.3% or 0.5% (depending on 5 year rule etc.).

What is the 2.5% please?

Never heard of it.

I have never sold property (bought yes, but seller paid all costs), but I don't think it's as simple as you claim.

From what I understand (have read) you have to pay three different amounts:

1. Withholding tax (basically income tax)
   The percentage depends on how long you have owned the property, the longer owned the lower the tax. It's a rather complex formula and not a simple percentage.
   
2. Government transfer fee
   A simple 2%.
   
3. Either stamp duty or specific business tax
   If owning more than 5 years you pay the 0.5% stamp duty, otherwise you pay 3.3% business tax. If property is owned through a company, you presumably aways pay the business tax.
   

All amounts are calculated on either the sales price or the government estimated value of the property. Transfer between close family is different and much cheaper, which may or may not explain some of the confusion.

See this link from Siam Legal for a more detailed description of the fees.

But as said, I have no personal experience with selling property in Thailand, so I (and Siam Legal) may be wrong.

Sophon

Edit: Foud this alternative link that states that the withholding tax is always 1% if seller is a company, and the complex progressive rate if seller is an individual. Since the land in the OP is owned by the Thai family, they will have to pay the (higher) individual rate, so not a fixed 1%.

Edited September 21, 2012 by Sophon

[breadbin]

sorry, just to come back to you, what were the taxes you paid then as they are not correct.

The taxes are these:-

2% transfer fee (of the registered value) = price declared

0.5% stamp duty = price declared

1% of appraised value - land office value

They are 100% NOT what you state. If you paid, 0.5%, 2.0% & 2.5% I would say you need to get clarification of what you paid.

Many lawyers can confirm that the percentages I put up are correct, I never ever heard of your fees and so am interested to know exactly what they are. The 0.5% & 2.0% are correct but the 2.5 is not, that will either be 3.3% or 0.5% (depending on 5 year rule etc.).

What is the 2.5% please?

Never heard of it.

I have never sold property (bought yes, but seller paid all costs), but I don't think it's as simple as you claim.

From what I understand (have read) you have to pay three different amounts:

1. Withholding tax (basically income tax)
   The percentage depends on how long you have owned the property, the longer owned the lower the tax. It's a rather complex formula and not a simple percentage.
   
2. Government transfer fee
   A simple 2%.
   
3. Either stamp duty or specific business tax
   If owning more than 5 years you pay the 0.5% stamp duty, otherwise you pay 3.3% business tax. If property is owned through a company, you presumably aways pay the business tax.
   

All amounts are calculated on either the sales price or the government estimated value of the property. Transfer between close family is different and much cheaper, which may or may not explain some of the confusion.

See this link from Siam Legal for a more detailed description of the fees.

But as said, I have no personal experience with selling property in Thailand, so I (and Siam Legal) may be wrong.

Sophon

Edit: Foud this alternative link that states that the withholding tax is always 1% if seller is a company, and the complex progressive rate if seller is an individual. Since the land in the OP is owned by the Thai family, they will have to pay the (higher) individual rate, so not a fixed 1%.

Hi Sophon

It is as simple as I claim!

The best thing to do, IMO, when you sell is to hire a lawyer, if you have no experience as I per me, and give then your title reference number, they can then contact the land office and get a calculation of fees to be paid. Simple!

I must say that this thread has been very good.

[breadbin]

Timekeeper, I may have further info for you.

I have done a lot of research on this subject, out of interst for myself and help to other.

My understanding is that the land can be transferred after the land registration date BUT the house will need to be registered after the blue book date, only 1 day, but this then will comply with the 5 year rule.

It's very interesting to find all of this out but, what you can do, if selling your house in you Thai family name is do this in 2 stages, with a contract signed and deposit paid, initial land transfer after land registration date and 50% payment made and then final transfer after blue book date with completion and balance of payment.

This way, all should be happy.

Hope this assists further.

[Sophon]

sorry, just to come back to you, what were the taxes you paid then as they are not correct.

The taxes are these:-

2% transfer fee (of the registered value) = price declared

0.5% stamp duty = price declared

1% of appraised value - land office value

They are 100% NOT what you state. If you paid, 0.5%, 2.0% & 2.5% I would say you need to get clarification of what you paid.

Many lawyers can confirm that the percentages I put up are correct, I never ever heard of your fees and so am interested to know exactly what they are. The 0.5% & 2.0% are correct but the 2.5 is not, that will either be 3.3% or 0.5% (depending on 5 year rule etc.).

What is the 2.5% please?

Never heard of it.

I have never sold property (bought yes, but seller paid all costs), but I don't think it's as simple as you claim.

From what I understand (have read) you have to pay three different amounts:

1. Withholding tax (basically income tax)
   The percentage depends on how long you have owned the property, the longer owned the lower the tax. It's a rather complex formula and not a simple percentage.
   
2. Government transfer fee
   A simple 2%.
   
3. Either stamp duty or specific business tax
   If owning more than 5 years you pay the 0.5% stamp duty, otherwise you pay 3.3% business tax. If property is owned through a company, you presumably aways pay the business tax.
   

All amounts are calculated on either the sales price or the government estimated value of the property. Transfer between close family is different and much cheaper, which may or may not explain some of the confusion.

See this link from Siam Legal for a more detailed description of the fees.

But as said, I have no personal experience with selling property in Thailand, so I (and Siam Legal) may be wrong.

Sophon

Edit: Foud this alternative link that states that the withholding tax is always 1% if seller is a company, and the complex progressive rate if seller is an individual. Since the land in the OP is owned by the Thai family, they will have to pay the (higher) individual rate, so not a fixed 1%.

Hi Sophon

It is as simple as I claim!

The best thing to do, IMO, when you sell is to hire a lawyer, if you have no experience as I per me, and give then your title reference number, they can then contact the land office and get a calculation of fees to be paid. Simple!

I must say that this thread has been very good.

All the links (from law firms) I can find say that it's only as simple as you say, when we are talking about a company selling property. If it is a private person selling, then the rate is progressive, and depends both on how long the person has owned the property as well as on the value of the property. The girlfiend bought some land only a couple of weeks ago, and the total fees (paid by seller) were considerably more than it would have been had withholding tax been a simple 1%. Have you read the links in my mail, if it is as simple as you say, why do law firms claim otherwise?

Is you experience based on property owned under a company or privately?

Sophon

[breadbin]

Law firms want money do they not? The law firm you mentioned, Siam Legal, when I asked them for a quote said 50,000bt but they would reduce to 30,000bt! This is massively excessive for a 3-5 million bt deal. In fact it is so ridiculous I told them who I was using and the fee they had agreed!!

The only real way to know the exact fees to pay, is for either the seller or their representative to go to the land office with a copy of the land title, etc. etc. and you will be given the excact fees to pay.

There is nothing cloak and dagger about it, if you have the relevant paperowrk they require they can calculate it for you very easily.

So,I have to argue that it is simple. I think the only way to complicate things is to guess youself at the fees and try to work them out from websites, although the websites do provide guidance but ONLY the land office can tell you EXACTLT what fees (taxex) will be due according to date on title, date on tabian bahn, assessed value of property and declared value of property.

If you ask them for the taxes, with the correct paperwork, they will tell you, simple.

Good luck all.

[Khun Jean]

It is not that easy because percentages for a part is not fixed, but by no means difficult.

The part that requires some calculations is the withholding tax.

Check out this page:

http://www.doingbusi...calculated.html

I saved a small table that was posted by someone before that gives a good overview:

It says 'held', that confuses it a little. If you bought it 5 years ago will you be in the 'held' for 5 or 6 years categorie.

Edited September 21, 2012 by Khun Jean