Land Tax

[Jeff1]

Hi,

Does anyone know how much percent the tax is for a land purchase ?

Thanks,

Jeff

[soihok]

Not sure on the percentage.

We(I mean the wife)have just bought 18 rai of farm land in Issan.

The total fee we paid at the land office was 10,000 Baht,but this includes transfer of ownership ,chanote.,

[Jeff1]

Not sure on the percentage.

We(I mean the wife)have just bought 18 rai of farm land in Issan.

The total fee we paid at the land office was 10,000 Baht,but this includes transfer of ownership ,chanote.,

Thanks for the feedback . May I ask where your land is ?

our...oops, her land is a hours drive north of korat and I have been hearing it's alot more than that but we are not sure yet . I would like to know what to expect .

[astral]

As I understand it the tax is based on

1. When the land last changed hands ( something for each year)

2. Whether the land has been improved (eg built upon)

The actual tax will be assessed by the official involved and has nothing (well very little) to do with the price agreed between the buyer and seller.

The official will value the land based on his experience of the area.

Sorry I know that is not very helpful.

[soihok]

So there is a anual tax?

I was n,t aware of that,cant be much if it is as the area is around Nong Thai just outside Korat,and big time rural.

!8.5 rai...300,000 bhat

Cheers

[Japhrodisiac]

This from the (now closed) offices of Kitt&Murray:

Property Taxation

Building and Land Tax is imposed on the owners of a house, building, structure or land, which is rented or otherwise put to commercial use. The tax rate is 12.5% of actual or assessed annual rental value of the property. (the annual value is the amount a property may reasonably gain in rent for one year, if the property is offered for lease.

A Local Development Tax is imposed upon any person who either owns or is in possession of land. The tax rates vary according to the appraised value of the property being determined by the local authorities. There is an allowance granted for land utilised for personal dwellings. This allowance differs according to the location of the land.

Land Office Fees (Note that registered value is much lower than current market value)

Transfer fee =

2% of registered value of property - Paid by the Buyer

Stamp Duty =

0.5% of registered value of property - Paid by the Seller

Withholding Tax =

1% of registered value of property - Paid by the Seller

Business Tax =

3.3% of appraised value of property - Paid by the Seller.

This is applicable to both individuals and companies.

-I believe that the Business Tax is applicable if the property is being sold with less than 5 yrs current ownership, but stand to be corrected on that by a lawyer. Cheers - J

[soihok]

Thanks for the info.

Cheers

[Jeff1]

Thanks for the replies . Even if three different posts had three different answers The scary part is that they are all probally true . I guess it depends on the location and what you plan to do with the land . In the area that her land is located we have been hearing anywhere from 1% of property pay off to 5000 a rai .

[Sunbelt Asia]

Hi,

Does anyone know how much percent the tax is for a land purchase ?

Thanks,

Jeff

Specific Business Tax with a flat rate of 3.3% on a selling price

Transfer Fees with a flat rate of 2% of an official appraised price

Stamp Duties with a flat rate of 0.5% of an official appraised price

Income Tax with a flat rate of 1% on a selling price for a juristic person or a progressive rate on a selling price for a natural person

Income Tax (Withholding Tax)

The above income tax will be imposed on the recipient of taxable income from the sale of real property. This income tax will be withheld by the land office upon the registration for transfer of the land. The recipient can be either natural person or juristic person which are limited companies, limited partnerships, condominium juristic persons, associations and foundation etc.

For the transfer of real property with the Land Office which is either only land or land and building, a seller or owner of the property will have to pay.

Natural Person Taxpayer

A natural person is subject to all taxes prescribed by law. The tax rate will be under the progressive rate as per the schedule under the Revenue Code with a maximum tax of 37%.

Juristic Person Taxpayer

If the recipient of taxable income is a juristic person, the tax will be calculated with a flat rate of 1%.

The income tax for both a natural and juristic person is based upon the actual selling price which cannot be lower than the official appraised price. If it is lower than they go with the appraised price.

How to calculation the Income Tax

If the company is the owner, the tax is 1% of the actual selling price which cannot be lower than the official appraised value.

If the Seller is a natural person, you have to look at the income in the schedule of the progressive rate under the Revenue Code of Thailand :-

not more than 100,000 0%

more than 100,000 - 500,000 10%

more than 500,000 - 1,000,000 20%

more than 1,000,000 - 4,000,000 30%

more than 4,000,000 37%

The method of calculation is like this....

You need to first calculate the amount of tax to be paid under the progressive rate, the gross amount of income will be first deducted by deductible allowance with the percentage according to a number of years the owner owns the land.

1 year 92%

2 years 84%

3 years 77%

4 years 71%

5 years 65%

6 years 60%

7 years 55%

8 years 50%

For example, if you sell the land you own for three years for the price of 4,000,000 baht, you may first deduct the allowance of 71% for the rate of 4 years being 2,840,000 baht. The sales price of 4,000,000 baht deducted by 2,840,000 baht is 1,160,000 baht.

The deducted amount of 1,160,000 baht will be divided by 4 years which has the result of 290,000 Baht.

290,000 baht will be used as the base to calculate the progressive tax rate being :-

0% for the amount not more than 100,000 baht being 0,000 baht

10% for the amount of 190,000 baht being 19,000 baht

The result is 19,000 baht.

The amount of 19,000 baht must be multiplied once again by the number of years the seller owns the land. In this case it was 4 years

The amount of tax to be paid is 76,000 baht.

Specific Business Tax

Specific Business Tax is a flat tax rate of 3.3% on the actual selling price is collected if the seller owns the land not more than 5 years. If the seller is not subject to the Specific Business Tax, the stamp duty of 0.5% will be applied.

Transfer Fees and Stamp Duties

Government fee for the transfer of land of 2% on the official appraised value is collected on the registration of transfer with the land office. The stamp duty of 0.5% is collected if the seller is exempted from Specific Business Tax.( own the land more than 5 years)

You should always negotiate hard with the seller and put this in the sales and purchase agreement on who pays the tax. We charge 15,000 Baht to negotiate on behalf of our clients( who have found a house, land, condo on their own) If they don't save at least 25,000 Baht from what the seller's final price( they have negotiated by themselves) , the professional fee is waived.

We strongly advocate that the Income Tax and Specific Business Tax is the responsibility of the seller as he is getting the income.

In most cases, we are able to convince the seller to split the transfer tax and stamp duty( if the seller was exempted from paying Specific Business Tax.

Most sellers will want the buyer to pay for everything as this they claim this is "standard" Nice try! This may be more than 6% of the selling price while with our negotiations, in a number of cases, it was only 1% tax for the buyer.

Capital Gains Tax

The annual corporate income tax for a SME is 15% from the net profits on the first million Baht in net profits, 25% tax from 1 million to 3 million and over 3 million baht in net profits is 30%. A SME is a company with registered capital lower than 5 million Baht.

www.sunbeltasiagroup.com

[soihok]

How,s that for a reply.

Thanks for info Sunbelt.

Cheers

[LoveDaBlues]

Not sure on the percentage.

We(I mean the wife)have just bought 18 rai of farm land in Issan.

The total fee we paid at the land office was 10,000 Baht,but this includes transfer of ownership ,chanote.,

I live in Issan also. Based on your post I'm *guessing* that there is no power/no water nearby the land you bought and most likely it is rice land. If the above is true you still GOT A VERY GOOD DEAL and congrats on that.

[Jeff1]

Thanks so much Greg. We got them nailed down to 1%

If anything gets weird I will call you .

[Sunbelt Asia]

Thanks so much Greg. We got them nailed down to 1%

If anything gets weird I will call you .

You are welcome. Good luck.

www.sunbeltasiagroup.com

[Nawtilus]

Withholding Tax...ok so on a sale of 14,000,000 and a property owned for 1 year, I got a figure of 918,000 in taxes. WHT of 176k...TT of 280k...BT of 462k.

What are the real and TIT ways of getting this tax amount reduced significantly to somewhat significantly.

I am aware of payment by 2 cashiers cheques etc. But are there any other little tricks that are used here?

Also re the withholding tax, presumably this is perceived to be the income for the person for the year...divided by the number of years. So if this is classified as income and taxed accordingly and held as withholding tax, when/how/maybe can it be ever claimed back ?? What if this person does not then have a significant income for the next 3 or 4 years, as in other countries can it then be claimed back, or is it tuff luck sunshine.

Edited August 31, 2006 by Nawtilus