sell house in company name to Thai person-whats involved?

[blackman]

i have looked and searched on the this forum -honest

i can't find exactly whats required that fits my situation but it must happen all the time

i have a house to sell, we are tentatively agreed at 10 MB

its in a long established company, all fees paid up to date

buyer does not want the company and wants to put the house in his Thai wifes name

whats involved in doing so?

i realize i will have to pay the accountant to close the company after the asset has been removed but other than that what costs can be anticipated in the transfer?

any helpful answers gratefully received

thanking you all in anticipation

[Langsuan Man]

It is going to cost you anywhere from 25,000 THB up just to close the company, there may be other minor fees but the biggest one is going to be for closing the company

Prior to closing the company and to make the sale you and the buyer must come to an agreement on who is going to pay the transfers and taxes from the sale

You may have to pay income tax on any profit that the company may have made on the sale

[scorecard]

When the seller* and buyer visit the Lands Titles Office to effect the transfer the LTO officers will want to see quite a few company documents, to indicate / support the company as the legal entity selling the property, and to prove that the company records are up to date (in other words the company is a legal entity at the date of the property transfer).

You're probably aware that LTO offices (like many Thai govt. officers) have slightly different interpretations of the relevant laws and regulations, and I'm aware that at some LTO offices they will want to see that the land / house has at some time been properly added to the company records, as well as the company name being inserted onto the chanut document at the time you (your company) purchased the property.

Also, from my understanding the value (Baht amount) added to the company records for the house and land assets is used in some formula to calculate the tax payable at the transfer of the house (change of name on the chant) from your company name to the buyers name.

There are of course posted processing fees at the LTO in additional to any taxes.

At some LTO offices they are quite serious to see that there is official written building permission to build the house (from my understanding this means houses built after a certain year - but I don't know what year this is). On the other hand, from my understanding, some LTO offices are not so serious about this.

I am aware of one case where there was no written official building permit, so the LTO charged an extra fee of 30,000Baht to 'put it right'. Whether this was 'tea money' I'm not sure.

If you have sold the house through a professional real estate agent then the agent should be well aware of the above.

In any event your accountant should be even more aware of the company documents needed at the local LTO and should, on your request, prepare a set of the needed company documents.

There are various LTO fees involved, including a specific fees relating to the fact that it's a company selling / transferring the house rather than a person selling the house. As already said this depends a bit on which LTO office is involved.

You also need to take the Tabien Baan book for the property to the LTO office and hand it in.

And I guess you are probably well aware that many LTO offices charge an additional 'farang fee' at the transfer.

*Some people suggest that in this scenario it's better for the farang to stay outside the LTO office unseen. But the LTO staff can easily see, from the company documents that there is a farang in the picture.

As already stated by another member, by law the company should pay company tax on the sale of the asset (this is an entirely different matter / tax compared to the Lands Titles transactions on the day of transfer of the chanut), but this is done at the end of the next financial year or as part of the close down of the company if this is completed before the next December.

The buyer, seeing it's a Thai person, needs to take their own original Thai ID card and the current Tabien Baan book where their name is recorded to the LTO.

As a different point, you could think about advising a few property agents that you have a company shell that you now don't need, all up to date, perhaps they might have a farang client who wants to buy a property and needs a company name. In this scenario it could be a win/win for you and the guy who needs a company name, all that needs to be done is to transfer the shares to a new set of shareholders, and this can be done on-line within a few minutes,

The downside that some people see, in regard to buying / acquiring a company name through this method, is that the new shareholders take a risk that the company has outstanding trading debts, unpaid loans, unfulfilled liabilities to customers, etc. Case by case of course.

Good luck.

Edited July 25, 2013 by scorecard

[blackman]

When the seller* and buyer visit the Lands Titles Office to effect the transfer the LTO officers will want to see quite a few company documents, to indicate / support the company as the legal entity selling the property, and to prove that the company records are up to date (in other words the company is a legal entity at the date of the property transfer).

You're probably aware that LTO offices (like many Thai govt. officers) have slightly different interpretations of the relevant laws and regulations, and I'm aware that at some LTO offices they will want to see that the land / house has at some time been properly added to the company records, as well as the company name being inserted onto the chanut document at the time you (your company) purchased the property.

Also, from my understanding the value (Baht amount) added to the company records for the house and land assets is used in some formula to calculate the tax payable at the transfer of the house (change of name on the chant) from your company name to the buyers name.

There are of course posted processing fees at the LTO in additional to any taxes.

At some LTO offices they are quite serious to see that there is official written building permission to build the house (from my understanding this means houses built after a certain year - but I don't know what year this is). On the other hand, from my understanding, some LTO offices are not so serious about this.

I am aware of one case where there was no written official building permit, so the LTO charged an extra fee of 30,000Baht to 'put it right'. Whether this was 'tea money' I'm not sure.

If you have sold the house through a professional real estate agent then the agent should be well aware of the above.

In any event your accountant should be even more aware of the company documents needed at the local LTO and should, on your request, prepare a set of the needed company documents.

There are various LTO fees involved, including a specific fees relating to the fact that it's a company selling / transferring the house rather than a person selling the house. As already said this depends a bit on which LTO office is involved.

You also need to take the Tabien Baan book for the property to the LTO office and hand it in.

And I guess you are probably well aware that many LTO offices charge an additional 'farang fee' at the transfer.

*Some people suggest that in this scenario it's better for the farang to stay outside the LTO office unseen. But the LTO staff can easily see, from the company documents that there is a farang in the picture.

As already stated by another member, by law the company should pay company tax on the sale of the asset (this is an entirely different matter / tax compared to the Lands Titles transactions on the day of transfer of the chanut), but this is done at the end of the next financial year or as part of the close down of the company if this is completed before the next December.

The buyer, seeing it's a Thai person, needs to take their own original Thai ID card and the current Tabien Baan book where their name is recorded to the LTO.

As a different point, you could think about advising a few property agents that you have a company shell that you now don't need, all up to date, perhaps they might have a farang client who wants to buy a property and needs a company name. In this scenario it could be a win/win for you and the guy who needs a company name, all that needs to be done is to transfer the shares to a new set of shareholders, and this can be done on-line within a few minutes,

The downside that some people see, in regard to buying / acquiring a company name through this method, is that the new shareholders take a risk that the company has outstanding trading debts, unpaid loans, unfulfilled liabilities to customers, etc. Case by case of course.

Good luck.

thank you for taking the time to post such a comprehensive answer

i think i will take the chanote and house book to the land office and see what they think the taxes/fees will be

[DonaldBattles]

This was an excellent analysis of the requirements for sale. I have a 400 square meter building in Bangkok that I have been trying to sell for some time and and no luck. The corporate taxes on the sale are expected to be around 37%. I do a a tax loss carry forward that should reduce the amount of corporate tax, I am insisting that the buyer pay all of the land transfer fees as this tends to cut down a lot of the funny stuff. Farangs should never be seen in the LTO.

[monty]

Transfer fee : 2%

Withholding tax: 1%

Stamp duty: 0.5%

or

Business tax: 3.3%

If the company owns the land more then 5 years, the business tax (3.3%) is not paid, but the stamp duty (0.5%) has to be paid.

If the company owns the land less then 5 years, they have to pay the 3.3% business tax, but no stamp duty.

Your biggest worry will be corporate tax for your company. This will all depend on how much the house initially was acquired for, and how much you are selling for now. The difference is profit and will be booked as such.

Likely part of the profit can be offset by expenses/depreciation, you'll need a good accountant to limit your tax liability.

Obviously the 1% withholding tax paid at time of transfer will be deducted from your due year end corporate taxes.

[craigt3365]

Good luck with getting a firm estimate from the LTO. My friends went 3-4 times and got different numbers each time. Different by significant amounts. They even went with an attorney the last time and the Thai attorney just shook his head.

Where is your house located??? I've heard the LTO in Bangkok is OK.

[BuriramRes]

It is going to cost you anywhere from 25,000 THB up just to close the company, there may be other minor fees but the biggest one is going to be for closing the company

Prior to closing the company and to make the sale you and the buyer must come to an agreement on who is going to pay the transfers and taxes from the sale

You may have to pay income tax on any profit that the company may have made on the sale

I did exactly this except we decided to close the company & transfer the house to my wife.

We went to a solicitor recommended by my lawyer who created the company in the first place.

The whole thing cost us 10,000B. The solicitor had the inside running with the local registration authorities & it was very quick & painless.

[DonaldBattles]

The tax in Thailand is the same as the law. It is what they decide today. Beware of what can happen to you. You can forget about the percentages that have been quoted at the LDO as they don't count. I am told that corporate LDO taxes range between 5%-10% based on how they feel that day. The last time I sold land that was in the company name the LDO in Phuket charged 7%. At least this is what the accountant told me. I never saw the receipt. Not sure they ever give you a receipt that is stamped signed and legal. BLOODY AMAZING!

[1kate1]

Why don't you just tell them the house is sold including the company at the price then its up to them to sort it out later...I have just sold and that is what I did House inc Company....otherwise you are going to have many headaches with the Thai part.....sorry.

[monkeycountry]

When the seller* and buyer visit the Lands Titles Office to effect the transfer the LTO officers will want to see quite a few company documents, to indicate / support the company as the legal entity selling the property, and to prove that the company records are up to date (in other words the company is a legal entity at the date of the property transfer).

You're probably aware that LTO offices (like many Thai govt. officers) have slightly different interpretations of the relevant laws and regulations, and I'm aware that at some LTO offices they will want to see that the land / house has at some time been properly added to the company records, as well as the company name being inserted onto the chanut document at the time you (your company) purchased the property.

Also, from my understanding the value (Baht amount) added to the company records for the house and land assets is used in some formula to calculate the tax payable at the transfer of the house (change of name on the chant) from your company name to the buyers name.

There are of course posted processing fees at the LTO in additional to any taxes.

At some LTO offices they are quite serious to see that there is official written building permission to build the house (from my understanding this means houses built after a certain year - but I don't know what year this is). On the other hand, from my understanding, some LTO offices are not so serious about this.

I am aware of one case where there was no written official building permit, so the LTO charged an extra fee of 30,000Baht to 'put it right'. Whether this was 'tea money' I'm not sure.

If you have sold the house through a professional real estate agent then the agent should be well aware of the above.

In any event your accountant should be even more aware of the company documents needed at the local LTO and should, on your request, prepare a set of the needed company documents.

There are various LTO fees involved, including a specific fees relating to the fact that it's a company selling / transferring the house rather than a person selling the house. As already said this depends a bit on which LTO office is involved.

You also need to take the Tabien Baan book for the property to the LTO office and hand it in.

And I guess you are probably well aware that many LTO offices charge an additional 'farang fee' at the transfer.

*Some people suggest that in this scenario it's better for the farang to stay outside the LTO office unseen. But the LTO staff can easily see, from the company documents that there is a farang in the picture.

As already stated by another member, by law the company should pay company tax on the sale of the asset (this is an entirely different matter / tax compared to the Lands Titles transactions on the day of transfer of the chanut), but this is done at the end of the next financial year or as part of the close down of the company if this is completed before the next December.

The buyer, seeing it's a Thai person, needs to take their own original Thai ID card and the current Tabien Baan book where their name is recorded to the LTO.

As a different point, you could think about advising a few property agents that you have a company shell that you now don't need, all up to date, perhaps they might have a farang client who wants to buy a property and needs a company name. In this scenario it could be a win/win for you and the guy who needs a company name, all that needs to be done is to transfer the shares to a new set of shareholders, and this can be done on-line within a few minutes,

The downside that some people see, in regard to buying / acquiring a company name through this method, is that the new shareholders take a risk that the company has outstanding trading debts, unpaid loans, unfulfilled liabilities to customers, etc. Case by case of course.

Good luck.

thank you for taking the time to post such a comprehensive answer

i think i will take the chanote and house book to the land office and see what they think the taxes/fees will be

Since the buyer is Thai, he/she most likely wants to keep the official purchase price as low as possible, to minimize transfer fees/taxes, which are all based on the official price, not the actual price. As this is also in the OP's interest, there should be no problem. Just keep the official transfer price as close to the official transfer price from when the OP bought the house as possible, and there will be no or very little profit from the sale, hence no taxes.

There is no "farang" tax/fee. However if the OP worries about this, just agree with the buyer to split all transfer taxes/fees 50/50 or similar. He/she being Thai will then make sure there are no farang issues, as that would then cost him/her as well.

Transfer taxes/fees are as posted by Monty above.

For those worrying about receipts, which the OP should as he needs to deduct them as expenses in his company, you will get receipts for all taxes and fees if you request them.

Edited July 26, 2013 by monkeycountry

[monkeycountry]

The tax in Thailand is the same as the law. It is what they decide today. Beware of what can happen to you. You can forget about the percentages that have been quoted at the LDO as they don't count. I am told that corporate LDO taxes range between 5%-10% based on how they feel that day. The last time I sold land that was in the company name the LDO in Phuket charged 7%. At least this is what the accountant told me. I never saw the receipt. Not sure they ever give you a receipt that is stamped signed and legal. BLOODY AMAZING!

It has nothing to do with "how they feel that day". But the total percentage varies depending on the situation of the seller as descibed by Monty above. In other words, you may or may not have to pay certain taxes depending on how long you have owned the house etc. These rules apply to Thais as well. My guess is that people think the charges are random simply because they do not understand them. Further, there are no fees for which you cannot get an official receipt.

[scorecard]

When the seller* and buyer visit the Lands Titles Office to effect the transfer the LTO officers will want to see quite a few company documents, to indicate / support the company as the legal entity selling the property, and to prove that the company records are up to date (in other words the company is a legal entity at the date of the property transfer).

You're probably aware that LTO offices (like many Thai govt. officers) have slightly different interpretations of the relevant laws and regulations, and I'm aware that at some LTO offices they will want to see that the land / house has at some time been properly added to the company records, as well as the company name being inserted onto the chanut document at the time you (your company) purchased the property.

Also, from my understanding the value (Baht amount) added to the company records for the house and land assets is used in some formula to calculate the tax payable at the transfer of the house (change of name on the chant) from your company name to the buyers name.

There are of course posted processing fees at the LTO in additional to any taxes.

At some LTO offices they are quite serious to see that there is official written building permission to build the house (from my understanding this means houses built after a certain year - but I don't know what year this is). On the other hand, from my understanding, some LTO offices are not so serious about this.

I am aware of one case where there was no written official building permit, so the LTO charged an extra fee of 30,000Baht to 'put it right'. Whether this was 'tea money' I'm not sure.

If you have sold the house through a professional real estate agent then the agent should be well aware of the above.

In any event your accountant should be even more aware of the company documents needed at the local LTO and should, on your request, prepare a set of the needed company documents.

There are various LTO fees involved, including a specific fees relating to the fact that it's a company selling / transferring the house rather than a person selling the house. As already said this depends a bit on which LTO office is involved.

You also need to take the Tabien Baan book for the property to the LTO office and hand it in.

And I guess you are probably well aware that many LTO offices charge an additional 'farang fee' at the transfer.

*Some people suggest that in this scenario it's better for the farang to stay outside the LTO office unseen. But the LTO staff can easily see, from the company documents that there is a farang in the picture.

As already stated by another member, by law the company should pay company tax on the sale of the asset (this is an entirely different matter / tax compared to the Lands Titles transactions on the day of transfer of the chanut), but this is done at the end of the next financial year or as part of the close down of the company if this is completed before the next December.

The buyer, seeing it's a Thai person, needs to take their own original Thai ID card and the current Tabien Baan book where their name is recorded to the LTO.

As a different point, you could think about advising a few property agents that you have a company shell that you now don't need, all up to date, perhaps they might have a farang client who wants to buy a property and needs a company name. In this scenario it could be a win/win for you and the guy who needs a company name, all that needs to be done is to transfer the shares to a new set of shareholders, and this can be done on-line within a few minutes,

The downside that some people see, in regard to buying / acquiring a company name through this method, is that the new shareholders take a risk that the company has outstanding trading debts, unpaid loans, unfulfilled liabilities to customers, etc. Case by case of course.

Good luck.

thank you for taking the time to post such a comprehensive answer

i think i will take the chanote and house book to the land office and see what they think the taxes/fees will be

Since the buyer is Thai, he/she most likely wants to keep the official purchase price as low as possible, to minimize transfer fees/taxes, which are all based on the official price, not the actual price. As this is also in the OP's interest, there should be no problem. Just keep the official transfer price as close to the official transfer price from when the OP bought the house as possible, and there will be no or very little profit from the sale, hence no taxes.

There is no "farang" tax/fee. However if the OP worries about this, just agree with the buyer to split all transfer taxes/fees 50/50 or similar. He/she being Thai will then make sure there are no farang issues, as that would then cost him/her as well.

Transfer taxes/fees are as posted by Monty above.

For those worrying about receipts, which the OP should as he needs to deduct them as expenses in his company, you will get receipts for all taxes and fees if you request them.

Mostly agree and your point about a prior agreement that all taxes /fees etc., be shared 50/50 buyer/seller is very valuable.

In fact a few months back I sold a house which was owned by a Thai company and the selling agent took this route with the actual buyer. The buyer, pretty astute guy did his homework, checked a few points with his lawyer and then agreed.

In the area I'm referring to the LTO senior is very aware of local prices, new houses / old houses / which villages seem to be developing capital gains etc etc., and I'm told that he does often reject statements from buyer / seller of ridiculous prices, but all of this is of course case by case. And no doubt there would be some folks who put very ridiculous sale / purchase price amounts on the transfer applications. Just human beings at work.

The LTO I am referring to does openly add a 'farang fee', which is of course not legal but that doesn't stop a lot of the corruption in this country. More than 20 years ago I bought my first land & house property (Thai company actual buyer) and on the day of transfer the LTO senior said:

- "Today is a public holiday for nearly all government offices in Thailand but the LTO must remain open today.

It's made my staff feel very sad today, so I'm asking all people who do business here today to make a contribution

to a small fund which I will distribute to all my staff to cheer them up. 30,000Baht please."

[DonaldBattles]

The fee is what they decide it is that day. You can get as many answers as you want by asking several people in the land office. If you forget that this is Thailand then you are in for a surprise. If you have never sold a piece of property that is owned by a farang nominee Thai majority company then there is no way you can expect to know. You simply take your chances and pay the money they want or delay selling.

[Bagwan]

When closing down a nominee company full accounts have to be rendered so it makes sense to close the company when the annual statement of accounts is due - or pay twice.

[Postmaster]

This is excellent information. Thanks

[blackman]

on a sale of 9 million out of comapny

the land office said they would want 453,300 baht

i got him to write it on the copy chanote, date and sign it

thanks to to everyone for their replies

[DonaldBattles]

Hoping that when you make the sale they don't switch LTO people and change their minds. It is not over until it is over.

[blackman]

Hoping that when you make the sale they don't switch LTO people and change their minds. It is not over until it is over.

they could change their minds and make it cheaper..