Transfer Fee Is 2% , Is It Legal For A Developer To Ask For More ?

[balo]

I have been told , although not confirmed yet that I have to pay more than 2% in transfer fees. Maybe more than 6% in total .

Yes I have signed a document (ownership transfer agreement) that says the buyer agrees to pay various taxes , stamp duty, and all transfer fees.

Well its only one transfer fee right? 2% and normally split 50/50 .

As I understand it the stamp duty , and various taxes like withholding tax and business tax is paid by the seller.

I have no problems to name the company, Matrix Group , and the condo is Paradise Park . Can they ask for more and get away with it?

When I asked about the transfer fee at their office before I signed the contract , I only got this the answer , they dont know yet ! Because the land office decides (transfer of condo will take place 5 months after I signed this agrement. ) .

Well after talking to several people they all agree that Matrix should not hide the fact from me that transfer fee is 2% .

Edited April 8, 2013 by balo

[BlackPuddingBertha]

If you have signed a contract saying you will pay the lot then it doesnt matter what normally happens. You will just have to pay the lot and learn from your lesson.

The Land Office will tell you how much it comes to but regardless of how much it is you have already agreed to pay it.

[AnotherOneAmerican]

I have just purchased a new house from a developer.

I can confirm total fees at land office, a smidgen over 6% of the purchase price.

Lucky for me, my contract says all fees paid by developer.

Transfer for me also 5 months after signing contract.

Edited April 8, 2013 by AnotherOneAmerican

[cheeryble]

Did your 2% figure fly out of a tree?

Pity the "several people" who gave you legal advice on which you decided to damn a developer in public didn't know more about actual transfer fees.

Edited April 8, 2013 by cheeryble

[jbrain]

Did your 2% figure fly out of a tree?

Pity the "several people" who gave you legal advice on which you decided to damn a developer in public didn't know more about actual transfer fees.

Maybe he got that figure from here

http://www.thaivisa.com/forum/topic/610610-land-price-agreed-what-do-i-need-to-do-now/?p=6013355

OP here are the tax and fee rates payable upon transfer.

• Transfer Fee 2% of the appraised value of the property
• Business Tax 3.3% of the registered (sale) value or appraised value (whichever is higher) but not paid if owned over 5 years
• Stamp Duty 0.5% of the registered value if owned over 5 years.
• Withholding tax;
• if the seller is a company withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher)
• if the seller is a private person withholding tax is calculated at a progressive rate based on the appraised value of the property

OP you as buyer should only pay the Transfer fee at most and seller should be responsible for the other three on the above list. All terms and sale price should be in a contract you sign with seller. Also there is no need to hand over any part of purchase price or transfer fees until you get to the land office and paperwork is ready for signatures.

Edited April 8, 2013 by jbrain

[balo]

Did your 2% figure fly out of a tree?

Pity the "several people" who gave you legal advice on which you decided to damn a developer in public didn't know more about actual transfer fees.

Maybe he got that figure from here

http://www.thaivisa.com/forum/topic/610610-land-price-agreed-what-do-i-need-to-do-now/?p=6013355

OP here are the tax and fee rates payable upon transfer.

• Transfer Fee 2% of the appraised value of the property
• Business Tax 3.3% of the registered (sale) value or appraised value (whichever is higher) but not paid if owned over 5 years
• Stamp Duty 0.5% of the registered value if owned over 5 years.
• Withholding tax;
• if the seller is a company withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher)
• if the seller is a private person withholding tax is calculated at a progressive rate based on the appraised value of the property

OP you as buyer should only pay the Transfer fee at most and seller should be responsible for the other three on the above list. All terms and sale price should be in a contract you sign with seller. Also there is no need to hand over any part of purchase price or transfer fees until you get to the land office and paperwork is ready for signatures.

Thanks thats what I have been told too , but that agreement I signed makes me think they will get away with it.

So I am only responsible for the 2% transfer fee!

I will not accept anything else from Matrix , I choosed to buy this condo because they had a good reputation from earlier projects.

I think in Park Lane, most of the buyers , mostly Russians, paid more than 2% in transfer fees and they will not be happy if they hear about this.

[thaiwanderer]

Did your 2% figure fly out of a tree?

Pity the "several people" who gave you legal advice on which you decided to damn a developer in public didn't know more about actual transfer fees.

Maybe he got that figure from here

http://www.thaivisa.com/forum/topic/610610-land-price-agreed-what-do-i-need-to-do-now/?p=6013355

OP here are the tax and fee rates payable upon transfer.

• Transfer Fee 2% of the appraised value of the property
• Business Tax 3.3% of the registered (sale) value or appraised value (whichever is higher) but not paid if owned over 5 years
• Stamp Duty 0.5% of the registered value if owned over 5 years.
• Withholding tax;
• if the seller is a company withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher)
• if the seller is a private person withholding tax is calculated at a progressive rate based on the appraised value of the property

OP you as buyer should only pay the Transfer fee at most and seller should be responsible for the other three on the above list. All terms and sale price should be in a contract you sign with seller. Also there is no need to hand over any part of purchase price or transfer fees until you get to the land office and paperwork is ready for signatures.

Thanks thats what I have been told too , but that agreement I signed makes me think they will get away with it.

So I am only responsible for the 2% transfer fee!

I will not accept anything else from Matrix , I choosed to buy this condo because they had a good reputation from earlier projects.

I think in Park Lane, most of the buyers , mostly Russians, paid more than 2% in transfer fees and they will not be happy if they hear about this.

get away with what exactly? you complying with what you have agreed with

there are many ways to cut a deal

you are responsible for what you have agreed to

I see no devious, nefarious or even unusual practice on the part of matrix

[wooloomooloo]

I think in Park Lane, most of the buyers , mostly Russians, paid more than 2% in transfer fees and they will not be happy if they hear about this.

Why are you concerned with what the Russians think. I doubt you ever gave them a second thought previously.

Fight your own battles.

If you've signed a contract and got stung then you'll know better next time. Did you employ a good lawyer?

[AnotherOneAmerican]

OP you as buyer should only pay the Transfer fee at most and seller should be responsible for the other three on the above list. All terms and sale price should be in a contract you sign with seller. Also there is no need to hand over any part of purchase price or transfer fees until you get to the land office and paperwork is ready for signatures.

I don't agree.

Large developers selling 'off plan' usually charge various instalments before the transfer.

Promise to buy, contract signing, 5 monthly payments (all of which count towards the deposit)

Amounts would be along the lines 10k (to reserve property, returnable if no home loan agreed), 50k (paid when bank offers home loan), 5x15k (monthly after contract signed) then at the Land Office bank pays over home loan and you pay over the outstanding amount.

Paying all at the land office would normally be private sales for second-hand homes.

@Woomaloo

Lawyers aren't normally used for new property sales, bank providing the home loan are your protection, they check the validity of new chanote.

But I agree, might be different for a foreigner paying 100% cash or where property has no chanote.

I'm wondering (@jbrain and woomaloo), have either of you purchased a new property 'off plan' from a developer in Thailand?

As your posts have not matched my experiences or expectations.

Edited April 9, 2013 by AnotherOneAmerican

[BlackPuddingBertha]

All terms and sale price should be in a contract you sign with seller.

Indeed. And the OP mentions in his first post that he has signed such an agreement accepting to pay all the transfer fees and taxes, so that's an end to the discussion.

He has screwed himself and there is nothing he can do now except learn from his lesson.

[topt]

Did your 2% figure fly out of a tree?

Pity the "several people" who gave you legal advice on which you decided to damn a developer in public didn't know more about actual transfer fees.

Maybe he got that figure from here

http://www.thaivisa.com/forum/topic/610610-land-price-agreed-what-do-i-need-to-do-now/?p=6013355

OP here are the tax and fee rates payable upon transfer.

• Transfer Fee 2% of the appraised value of the property
• Business Tax 3.3% of the registered (sale) value or appraised value (whichever is higher) but not paid if owned over 5 years
• Stamp Duty 0.5% of the registered value if owned over 5 years.
• Withholding tax;
• if the seller is a company withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher)
• if the seller is a private person withholding tax is calculated at a progressive rate based on the appraised value of the property

OP you as buyer should only pay the Transfer fee at most and seller should be responsible for the other three on the above list. All terms and sale price should be in a contract you sign with seller. Also there is no need to hand over any part of purchase price or transfer fees until you get to the land office and paperwork is ready for signatures.

I am purely curious - so from the above it means that the tax dept. takes the business tax on every new build (house and condo) when a developer sells it to a buyer unless the developer has not sold it for 5 years?

[AnotherOneAmerican]

I am purely curious - so from the above it means that the tax dept. takes the business tax on every new build (house and condo) when a developer sells it to a buyer unless the developer has not sold it for 5 years?

I'm of the impression a 'business tax' would have to be paid whenever a business sold a property.

The five years 'get out' would only be for private sales.

[jack1964]

I would be talking to the developer and get the exact breakdown of costs. The Matrix Group have built up a very good reputation in Pattaya, and sell a huge amount of condo's, and have done so for a number of years. I know for a fact that they have many repeat customers, buying multiple units, so I doubt that they would be trying to do anything underhanded with government associated costs of purchasing a condo. If done on a large scale, it would have been spoken about all over town, and I dont believe for the pittance it would make them that they would stick up one or two customers at a time. It just wouldnt make sense. Your best bet is to get the exact and correct information from them, ask for it in writting, and repost the outcome.

[balo]

All terms and sale price should be in a contract you sign with seller.

Indeed. And the OP mentions in his first post that he has signed such an agreement accepting to pay all the transfer fees and taxes, so that's an end to the discussion.

He has screwed himself and there is nothing he can do now except learn from his lesson.

Yes maybe call me naive , but I trusted them and when they asked me to sign this agreement I had to sign it as the rest of the buyers that moved in .

"The buyer agrees to pay all various taxes and expenses, including stamp duty, all transfer fees, in connection with transfer ownership."

I mean they are not specific about anything here, various taxes could mean anything, I just want to make sure about this. Stamp Duty is 0.5% so that is not a big deal for me to pay . But various taxes and suddenly we are talking about more than 6% here.

Its only one transfer fee and that is 2% at the land office. That is the Thai law. If they want me to pay the taxes that the seller is responsible for , because I signed this agreement , then they are thieves imo , and they will get away with it.

Edited April 9, 2013 by balo

[BlackPuddingBertha]

Yes maybe call me naive , but I trusted them and when they asked me to sign this agreement I had to sign it as the rest of the buyers that moved in .

You are naive and no one should ever trust anyone who is selling anything, especially not farangs selling property here. Too many of them are here because they are wanted by the police in their own country, or just not wanted by their own countrymen.

You did have the choice of signing, or not signing, or indeed just crossing out the bits you didnt like and rewriting them to suit you better and then signing. This is what I would have done and in fact is what I did do for my tenancy agreement.

Your signed agreement clearly states all taxes and expenses, so there is nothing illegal or improper or dishonest about it, and you really have nothing to complain about.

[colinp]

"Its only one transfer fee and that is 2% at the land office. That is the Thai law."

There is:

Transfer fee - 2%

Witholding fee - 1%

Business tax - 3.3% (pro-rata depending on how many years owned, threshold of 5 years. Paid by individuals and companies)

Stamp duty - 0.5% (once the 5 year threshold has passed)

All these taxes are to be paid at the land office, that is the Thai law. Who pays is a matter of negotiation.

It seems common to go 50/50 on all taxes/transfer duties but again it's down to negotiation.

Edited April 9, 2013 by colinp

[jack1964]

There are set taxes and costs when purchasing a condo, and they will not vary over and above what is legal and lawful, and new condo developers, depending on their structures, will usually charge the full amount to the purchaser. In recent times, some developers have started to split the cost 50/50 with the customer, but many dont. Matrix will be able to tell you the approximate costs you are up for at the land office if the condo has been surveyed at this point, as the transfer price is as per the land offices valuation. Ask a few other residents that have paid their transfer for a same sized condo within the complex. Matrix should have a good understanding of the land offices valuation for your condo, as the land offices valuation is usually under the price you paid per square meter.

[thaiwanderer]

All terms and sale price should be in a contract you sign with seller.

Indeed. And the OP mentions in his first post that he has signed such an agreement accepting to pay all the transfer fees and taxes, so that's an end to the discussion.

He has screwed himself and there is nothing he can do now except learn from his lesson.

Yes maybe call me naive , but I trusted them and when they asked me to sign this agreement I had to sign it as the rest of the buyers that moved in .

"The buyer agrees to pay all various taxes and expenses, including stamp duty, all transfer fees, in connection with transfer ownership."

I mean they are not specific about anything here, various taxes could mean anything, I just want to make sure about this. Stamp Duty is 0.5% so that is not a big deal for me to pay . But various taxes and suddenly we are talking about more than 6% here.

Its only one transfer fee and that is 2% at the land office. That is the Thai law. If they want me to pay the taxes that the seller is responsible for , because I signed this agreement , then they are thieves imo , and they will get away with it.

you didn't have to sign anything

neither did you have to fail to check before signing what was entailed by "The buyer agrees to pay all various taxes and expenses, including stamp duty, all transfer fees, in connection with transfer ownership."

they are not thieves

[oracle]

When you buy a condo unit from a developer I think you have to look at the condo act 6/2, under the regulations issued under this setion I believe it specifies the developer's obligation to be responsible for its income tax, specific business tax, and half of the registration fee. He cannot ask you to pay that, that would make that part invalid..

[manarak]

"Its only one transfer fee and that is 2% at the land office. That is the Thai law."

There is:

Transfer fee - 2%

Witholding fee - 1%

Business tax - 3.3% (pro-rata depending on how many years owned, threshold of 5 years. Paid by individuals and companies)

Stamp duty - 0.5% (once the 5 year threshold has passed)

All these taxes are to be paid at the land office, that is the Thai law. Who pays is a matter of negotiation.

It seems common to go 50/50 on all taxes/transfer duties but again it's down to negotiation.

exactly.

[54321]

If you have signed a contract saying you will pay the lot then it doesnt matter what normally happens. You will just have to pay the lot and learn from your lesson.

The Land Office will tell you how much it comes to but regardless of how much it is you have already agreed to pay it.

My understanding (based on some kind poster posting a link to the condo act) is that they have to pay at least 50% of the transfer fee, so they have to pay 1% at least, and you have to pay 1% at most. Sorry I do not have the link but a quick search would no doubt find it

[balo]

"Its only one transfer fee and that is 2% at the land office. That is the Thai law."

There is:

Transfer fee - 2%

Witholding fee - 1%

Business tax - 3.3% (pro-rata depending on how many years owned, threshold of 5 years. Paid by individuals and companies)

Stamp duty - 0.5% (once the 5 year threshold has passed)

All these taxes are to be paid at the land office, that is the Thai law. Who pays is a matter of negotiation.

It seems common to go 50/50 on all taxes/transfer duties but again it's down to negotiation.

exactly.

Not true , this is what I found from a lawyer office in Pattaya, this is the responsibilities for buyer and seller:

TAX WHICH PARTY NORMALLY PAYS AMOUNT

Transfer Fee Buyer 2% of Registered value

Stam'p Duty Seller 0.5% of Registered value

Wiithholding Tax Seller 1% of appraised value

Business Tax Seller 3.3% of appraised value

Edited April 9, 2013 by balo

[54321]

If you have signed a contract saying you will pay the lot then it doesnt matter what normally happens. You will just have to pay the lot and learn from your lesson.

The Land Office will tell you how much it comes to but regardless of how much it is you have already agreed to pay it.

My understanding (based on some kind poster posting a link to the condo act) is that they have to pay at least 50% of the transfer fee, so they have to pay 1% at least, and you have to pay 1% at most. Sorry I do not have the link but a quick search would no doubt find it

found it

http://www.samuiforsale.com/knowledge/practical-legal-for-condos.html#20

"When buying in a condominium development the seller (developer) can under consumer protection laws only pass on up to half of the 2% ownership transfer fee to the buyer - read more..."

[jbrain]

"Its only one transfer fee and that is 2% at the land office. That is the Thai law."

There is:

Transfer fee - 2%

Witholding fee - 1%

Business tax - 3.3% (pro-rata depending on how many years owned, threshold of 5 years. Paid by individuals and companies)

Stamp duty - 0.5% (once the 5 year threshold has passed)

All these taxes are to be paid at the land office, that is the Thai law. Who pays is a matter of negotiation.

It seems common to go 50/50 on all taxes/transfer duties but again it's down to negotiation.

exactly.

Not true , this is what I found from a lawyer office in Pattaya, this is the responsibilities for buyer and seller:

TAX WHICH PARTY NORMALLY PAYS AMOUNT

Transfer Fee Buyer 2% of Registered value

Stam'p Duty Seller 0.5% of Registered value

Wiithholding Tax Seller 1% of appraised value

Business Tax Seller 3.3% of appraised value

That is indeed how it NORMALLY is handled, but since you have signed a document that states

the buyer agrees to pay various taxes , stamp duty, and all transfer fees.

I'm afraid you have no leg to stand on.

[balo]

When you buy a condo unit from a developer I think you have to look at the condo act 6/2, under the regulations issued under this setion I believe it specifies the developer's obligation to be responsible for its income tax, specific business tax, and half of the registration fee. He cannot ask you to pay that, that would make that part invalid..

Excactly, but I have signed an agreement , but when it says various taxes its just not much worth as a document in my opinion.

If I had seen the same agreement that states all the taxes like business and witholding tax I would never signed it m because I knew that business tax is not my responsibility to pay as a buyer.

Edited April 9, 2013 by balo

[balo]

If you have signed a contract saying you will pay the lot then it doesnt matter what normally happens. You will just have to pay the lot and learn from your lesson.

The Land Office will tell you how much it comes to but regardless of how much it is you have already agreed to pay it.

My understanding (based on some kind poster posting a link to the condo act) is that they have to pay at least 50% of the transfer fee, so they have to pay 1% at least, and you have to pay 1% at most. Sorry I do not have the link but a quick search would no doubt find it

found it

http://www.samuiforsale.com/knowledge/practical-legal-for-condos.html#20

"When buying in a condominium development the seller (developer) can under consumer protection laws only pass on up to half of the 2% ownership transfer fee to the buyer - read more..."

Thanks for the link, will print it out before I have a meeting with Matrix.

[colinp]

"Its only one transfer fee and that is 2% at the land office. That is the Thai law."

There is:

Transfer fee - 2%

Witholding fee - 1%

Business tax - 3.3% (pro-rata depending on how many years owned, threshold of 5 years. Paid by individuals and companies)

Stamp duty - 0.5% (once the 5 year threshold has passed)

All these taxes are to be paid at the land office, that is the Thai law. Who pays is a matter of negotiation.

It seems common to go 50/50 on all taxes/transfer duties but again it's down to negotiation.

exactly.

Not true , this is what I found from a lawyer office in Pattaya, this is the responsibilities for buyer and seller:

TAX WHICH PARTY NORMALLY PAYS AMOUNT

Transfer Fee Buyer 2% of Registered value

Stam'p Duty Seller 0.5% of Registered value

Wiithholding Tax Seller 1% of appraised value

Business Tax Seller 3.3% of appraised value

Stating what party 'Normally' pays does not make a legal responsiblity or any other type of responsibility. It is part of the negotiation.

Your original post said 'Yes I have signed a document (ownership transfer agreement) that says the buyer agrees to pay various taxes , stamp duty, and all transfer fees.' not just 'various taxes. you have agreed to pay all.

To add a small silver lining, its not unusual for a new condominium/project to state buyer pays all fees on transfer date. Have a look in the Bangkok Post and check out the small print on some adverts, I'm pretty sure Sansiri projects show exactly that.

Your situation is a case of being caught unaware, maybe you can use that and contact the developer. Maybe they will agree if you plead your side. Good luck.

[54321]

"Its only one transfer fee and that is 2% at the land office. That is the Thai law."

There is:

Transfer fee - 2%

Witholding fee - 1%

Business tax - 3.3% (pro-rata depending on how many years owned, threshold of 5 years. Paid by individuals and companies)

Stamp duty - 0.5% (once the 5 year threshold has passed)

All these taxes are to be paid at the land office, that is the Thai law. Who pays is a matter of negotiation.

It seems common to go 50/50 on all taxes/transfer duties but again it's down to negotiation.

exactly.

Not true , this is what I found from a lawyer office in Pattaya, this is the responsibilities for buyer and seller:

TAX WHICH PARTY NORMALLY PAYS AMOUNT

Transfer Fee Buyer 2% of Registered value

Stam'p Duty Seller 0.5% of Registered value

Wiithholding Tax Seller 1% of appraised value

Business Tax Seller 3.3% of appraised value

Stating what party 'Normally' pays does not make a legal responsiblity or any other type of responsibility. It is part of the negotiation.

Your original post said 'Yes I have signed a document (ownership transfer agreement) that says the buyer agrees to pay various taxes , stamp duty, and all transfer fees.' not just 'various taxes. you have agreed to pay all.

To add a small silver lining, its not unusual for a new condominium/project to state buyer pays all fees on transfer date. Have a look in the Bangkok Post and check out the small print on some adverts, I'm pretty sure Sansiri projects show exactly that.

Your situation is a case of being caught unaware, maybe you can use that and contact the developer. Maybe they will agree if you plead your side. Good luck.

I suspect (but could be wrong) that the law overides an unfair and seemingly illegal term in a contract.

[54321]

If you have signed a contract saying you will pay the lot then it doesnt matter what normally happens. You will just have to pay the lot and learn from your lesson.

The Land Office will tell you how much it comes to but regardless of how much it is you have already agreed to pay it.

My understanding (based on some kind poster posting a link to the condo act) is that they have to pay at least 50% of the transfer fee, so they have to pay 1% at least, and you have to pay 1% at most. Sorry I do not have the link but a quick search would no doubt find it

found it

http://www.samuiforsale.com/knowledge/practical-legal-for-condos.html#20

"When buying in a condominium development the seller (developer) can under consumer protection laws only pass on up to half of the 2% ownership transfer fee to the buyer - read more..."

Thanks for the link, will print it out before I have a meeting with Matrix.

your welcome, and good luck. I have had issues with developers and so far have had the issues resolved as soon as I have bypassed sales and contacted their head offices.

[PattayaPhom]

You are buying in foreign name and not company name