Tax Question

[stevieff]

Hi,

My thai wife is selling our house which we have lived in for more than one year. The house and land are in her name. We should see a small profit. My question is, is she liable to pay capital gains on the profit even though we have lived in the house for more than one year?

[Dragonman]

Hi,

My thai wife is selling our house which we have lived in for more than one year. The house and land are in her name. We should see a small profit. My question is, is she liable to pay capital gains on the profit even though we have lived in the house for more than one year?

She does not have to declare to Revenue Department if she is buying a new property within the next year, or has bought within the last year. There is no such thing as Capital Gains Tax in Thailand, only personal income tax on sales.

[stevieff]

Thanks for the response. I'll be a little broader. Is she responsible for any tax on any profit she has owned and lived in for a period of more than one year?

[Dragonman]

Thanks for the response. I'll be a little broader. Is she responsible for any tax on any profit she has owned and lived in for a period of more than one year?

You will appreciate that in Thailand nothing is hard and fast

As at March 2006 the Government was planning to implement new rules to stimulate the second hand market. These included the ending of Specific Business Tax for private ownerships where the owner has lived in the property for more than 1 year. Currently there is a scale and amount decided on by the Land Office, for up to 5 years. However they also announced that the first 50,000 baht of profits were to be excluded from Income Tax where the owner was acquiring a new property. Despite Income Tax having been excluded from Revenue Department requirements since 2003.

In other words it's the normal rule of thumb in Thailand. When they give you a bill you have to pay it, as nobody will admit they haven't got a clue.

[stevieff]

Thanks, Dragonman. I think the hard and fast rule of Thailand should be "The more you know, the more you will be confused".

[Dragonman]

Thanks, Dragonman. I think the hard and fast rule of Thailand should be "The more you know, the more you will be confused".

Very true! My advice would be:- Let the Land Office do the calculation of Specific Business Tax when you sell, maximum 3.3% but normally considerably less. Do not inform the Revenue Department if you are buying a new house, as their own rules advise you not to. If you are not buying a new home, "up to you".