Bulldozer Dawn Posted September 6, 2015 Share Posted September 6, 2015 When buying a property the transfer fee is calculated at 2% of the "appraised" value of the land. This appraised value is similar to the rateable value back in Western countries and it is more often than no lower than the sales price of the property. Tomorrow I am going to the land office with a copy of a title deed to ask if they will let me know the appraised value for the subject property. Does anyone know the thai words for appraised value, and will the land office give me that information? Thanks in advance for any assistance. Link to comment Share on other sites More sharing options...
ezzra Posted September 7, 2015 Share Posted September 7, 2015 Yes ask for Rakha Pa- moun.... meaning: average valuations per sq. meter/ talang wa of your property in your area.... Link to comment Share on other sites More sharing options...
natway09 Posted September 7, 2015 Share Posted September 7, 2015 Just land, no house? Yes, they will give the value to you. Be careful not to tell them the consideration that is actually being paid Link to comment Share on other sites More sharing options...
Minnehaha Posted September 7, 2015 Share Posted September 7, 2015 can be done on the phone in most cases. maybe not for land in the boondocks. but can certainly be done for condos. there will be a price for the condo space and another for balcony. it is really straight forward. not telling the the purpose or sale price? first it won't come up in the conversation, and even if it did it makes no difference. they record the price that is reported when the transfer is made. that price may or may not be same as he actual price paid for land/building asset. for example many people record a price significantly lower than the actual transaction price to lower fees. some record a higher value in order to get a larger loan from the bank. the land office does not care. Link to comment Share on other sites More sharing options...
Pib Posted September 7, 2015 Share Posted September 7, 2015 Yea, the value recorded at the land office is not an accurate estimate of true value due to the reasons mentioned by Minnehaha above. It's common for the value to be lower (much) to minimize taxes like it's last sell may have actaully been for Bt6M but recorded as Bt3M Link to comment Share on other sites More sharing options...
carter1882 Posted September 7, 2015 Share Posted September 7, 2015 It is a good thing to find out the rakhaa pramuun beforehand! I have had some nasty learning experiences in this regard and more recently seen some freaked out Thais scurrying off to the ATM. As already mentioned, the land office have their ways and that is what they do. Link to comment Share on other sites More sharing options...
charliebadenhop Posted September 7, 2015 Share Posted September 7, 2015 What will you actually learn when you learn the appraised value? I ask, because as others have already said, the appraised value and the really value are almost always very different. Link to comment Share on other sites More sharing options...
crazykopite Posted September 7, 2015 Share Posted September 7, 2015 So what happens to an appraised value if a Thai goes and gets a bank loan or mortgage on a property surely the bank would want the correct selling price to be registered with the land office . Link to comment Share on other sites More sharing options...
Thongkorn Posted September 7, 2015 Share Posted September 7, 2015 I thought the seller paid all the fees anyway , Mine did. Link to comment Share on other sites More sharing options...
sendintheclowns Posted September 7, 2015 Share Posted September 7, 2015 As has been asked already, why do you need to know the appraised value - and is it land only or a condo? If it Is it land you are considering to purchase, as you know, you can't do that directly. These is not enough to information to advise you on the broader implications of your question. Can you provide some more details? Are you going to use a company? Are you planning to put it in wife/girlfriend's name? Whatever, I strongly suggest that you reconsider going in to the Land Office, without having all the answers, to any questions they might ask you, ahead of time. A Thai company we are connected with sold some land last year, on Phuket. Was very surprised that our lawyers removed us from the shareholders list, before going to the Land Office.. Just my opinion. Link to comment Share on other sites More sharing options...
Bulldozer Dawn Posted September 8, 2015 Author Share Posted September 8, 2015 What will you actually learn when you learn the appraised value? I ask, because as others have already said, the appraised value and the really value are almost always very different. You learn the figure against which the 2% transfer fee is calculated. I went to the land office yesterday, and, quiet unsurprisingly, most of the information posted here is incorrect. Firstly, the transliteration for the appraised value is Rakka Pramein. It is also often referred to as the Rakka Ching. Second, there is some utility in knowing the appraised value as the transfer fee is often met by the buyer. Third, the Rakka Parmein is not the same as the average sales price per talang wah in a specific area. Finally, the details of the property I am considering are well documented in my other thread: http://www.thaivisa.com/forum/topic/852680-a-screaming-bargainor-notadvice-needed-regarding-buying-an-unfinished-house/ Link to comment Share on other sites More sharing options...
blackcab Posted September 8, 2015 Share Posted September 8, 2015 Our company regularly goes to the land office to find out who owns land. If you have a copy of the chanote then show them that. If not then the land office has large format maps put together in convenient bundles. You tell the official the nearest road junction and they get you the relevant sheet. You then indicate the precise plot and they print you out the current appraisal which will have the appraised value for both the land and a separate appraisal for the buildings. This sheet also has the name and address of the owner. If you want a copy of the chanote this costs a little extra but will give you the sales history and if any loans are outstanding, etc. Depending on how well you get on with the staff they may or may not let you browse through the full document wallet which will have details of the mortgage amount (if any), phone numbers and copies of the house book of the owner. The cost is officially 65 baht, which is what you get a receipt for. The actual cost for us is about 200 baht. That's normally money very well spent. There's nothing unusual about doing this. The land office has a form to complete specifically for research purposes and there is a counter just for this purpose. As I mentioned the company I work for does it quite often. In one visit we may make 10 requests to enquire about a parcel of land and then most of the adjoining plots. To be frank the land office really don't care why you are asking. They are normally way too busy. Link to comment Share on other sites More sharing options...
Bulldozer Dawn Posted September 8, 2015 Author Share Posted September 8, 2015 Our company regularly goes to the land office to find out who owns land. If you have a copy of the chanote then show them that. If not then the land office has large format maps put together in convenient bundles. You tell the official the nearest road junction and they get you the relevant sheet. You then indicate the precise plot and they print you out the current appraisal which will have the appraised value for both the land and a separate appraisal for the buildings. This sheet also has the name and address of the owner. If you want a copy of the chanote this costs a little extra but will give you the sales history and if any loans are outstanding, etc. Depending on how well you get on with the staff they may or may not let you browse through the full document wallet which will have details of the mortgage amount (if any), phone numbers and copies of the house book of the owner. The cost is officially 65 baht, which is what you get a receipt for. The actual cost for us is about 200 baht. That's normally money very well spent. There's nothing unusual about doing this. The land office has a form to complete specifically for research purposes and there is a counter just for this purpose. As I mentioned the company I work for does it quite often. In one visit we may make 10 requests to enquire about a parcel of land and then most of the adjoining plots. To be frank the land office really don't care why you are asking. They are normally way too busy. Thanks for your input. The local land office here is rather low key. They have computers but some of them appear steam driven. I had a copy of the title deed with me, and as you correctly advised, a girl went through a ringbinder of the maps to locate the subject property area. She then provided me a calculation for the appraised value. There is no sales history on this block as it was a gift to the current owner from her mother. The down side is that she has had the deed in her name less than 5 years so SBT will apply. That is why arriving a final price has been a little problematic. Link to comment Share on other sites More sharing options...
charliebadenhop Posted September 9, 2015 Share Posted September 9, 2015 What is SBT? Not sure if I missed it in one of the posts, but I still can't understand what you will learn of importance from learning the appraised value, except for getting an idea of how much the last person under-declared the price. And in your case not even a previous price. Here is a scenario that I have often seen- I used to buy handicrafts in India and Nepal, and I knew the "real" price of everything I bought. Once I was standing with a man I bought from, in front of his store. I paid $10 for a certain item, and I bought fairly large quantity. A tourist came along and the vendor asked for $40 for the same item that I bought for $10. He let the tourist haggle him down to $20. When the tourist left he said, "I would have been glad to accept $15, but so many tourists have the idea that vendors double the price for tourists, so reflexively they quote half the price that I state. Due diligence and REALLY knowing local prices is crucial. Also, a LOT depends on how active the market is. In Chiang Rai prices vary wildly, sometimes with one piece of land only being a couple hundred meters from the other piece. The market here is getting overheated because ASEAN is moving in. One suggestion is that you will do well to create a rationale for why you are asking for the price you are asking for... "I only have X and if you can't accept that, then I will need to look elsewhere." "After checking extensively I found these prices A. B, C and thus I do not want to pay more than that." OR ask them what their rationale is for wanting the price they want. One thing is almost always for certain- If they say "Yes" to your price too quickly, then you have almost certainly paid to much. You need to create reasons for having several conversations with them. Reasons other than simply trying to talk them down in price. cb Link to comment Share on other sites More sharing options...
dean008 Posted September 10, 2015 Share Posted September 10, 2015 For those who cannot understand the importance of knowing the appraised value, it is because the 2% transfer tax is based on the appraised value OR declared value (if it is higher), also if you have owned the property for under 5 years you pay a business tax of 3.3% based on the same value. If you are selling property for 15 million and the appraised value is 10 million at 5.3% thats 530,000 baht in tax, so you may well be advised to quote the appraised value as the selling price and lets say the other 5 million for goodwill, furniture fixtures and fittings and save a small fortune in tax. That is my understanding anyway Link to comment Share on other sites More sharing options...
charliebadenhop Posted September 10, 2015 Share Posted September 10, 2015 dean008 I read- "There is no sales history on this block as it was a gift to the current owner from her mother. The down side is that she has had the deed in her name less than 5 years so SBT will apply. That is why arriving a final price has been a little problematic." I still fail to see how knowing the appraised value would make arriving at a final sales price any easier. The seller might have to pay 3.3% but at the most, the buyer would pay 2%. To me, that would have little to no effect on what I offer for the buying price. Save B1 mill on selling price and you save about $650 in tax. Not a driving factor in my mind. Link to comment Share on other sites More sharing options...
blackcab Posted September 10, 2015 Share Posted September 10, 2015 The appraised value (and therefore the taxes payable to buy/sell the property) are useful for a couple of reasons. 1. As a benchmark. If you can buy the land at about the appraised value then it's a good starting point as it is more likely than not that you will be onto a good thing. This does happen from time to time. 2. Getting the best deal. In the case of more expensive property purchases the total taxes payable can be considerable sums of money. It is possible to agree a deal and then press a desperate seller to pay 100% of the taxes due. This can amount to many millions of baht. Link to comment Share on other sites More sharing options...
charliebadenhop Posted September 10, 2015 Share Posted September 10, 2015 Hi Blackcap, I do understand what you are saying... In regard to getting the best deal... I would tend to offer to pay the taxes for the seller in return for a better price, following the principle of offering something prior to asking for something. As far as the appraised value being a benchmark, I don't know of anyone willing to sell at the appraised value unless they are truly desperate, and if I am well informed I will already know that the price they are willing to sell out is way below market value. So anyway... for me, the appraised value has little meaning. But different strokes for different folks. One benchmark that can be good is- Look at how much 1 Ngan of land is selling for in various locations close to where you are considering buying. So, for instance, B200,000 per Ngan. Then if you are considering buying a Rai, go for a price that is not more than B400,000 per Rai, or B100,000 for each of the 4 Ngan you will be getting. If you do this you can pretty much guarantee that you will be fairly successful, and this kind of scenario is reasonably common. Keeping in mind whether the land will need "fill" or not, which will increase the price fairly significantly. Link to comment Share on other sites More sharing options...
Bulldozer Dawn Posted September 10, 2015 Author Share Posted September 10, 2015 The appraised value (and therefore the taxes payable to buy/sell the property) are useful for a couple of reasons. 1. As a benchmark. If you can buy the land at about the appraised value then it's a good starting point as it is more likely than not that you will be onto a good thing. This does happen from time to time. 2. Getting the best deal. In the case of more expensive property purchases the total taxes payable can be considerable sums of money. It is possible to agree a deal and then press a desperate seller to pay 100% of the taxes due. This can amount to many millions of baht. I wanted to get a handle on the tax payable because my offer to owner was incl. of all fees and taxes. The risk that the calculations are inaccurate is then passed on to her. As I posted on the other thread regarding this property a loan shark currently has the title deed and he lent 15Ok with the deed as collateral. I imagine a bottom feeder like him would seldom lend more than 20 to 30 percent of the value of a plot, and so that has given me some encouragement that the deal has some value in it. Link to comment Share on other sites More sharing options...
dean008 Posted September 11, 2015 Share Posted September 11, 2015 May I ask a theoretical question about a condo? Appraised value 1.2 million Agreed selling price 2 million Seller agrees to pay transfer tax and has to pay business tax. Is it normal to tell the land office the price is 1.2 million? Do they see the contract? Are there any financial disadvantages (based on the current rules and regs) to the buyer for paying 2 million of a property appraised at 1.2 million? If you tell the land office the price is 2 million and the tax is 5.3% -just over 100,000 baht. Tell the land office the price is 1.2 million and the tax is still 5.3% - about 60,000 baht Thats why its important to know the appraised value Link to comment Share on other sites More sharing options...
hhgz Posted September 14, 2015 Share Posted September 14, 2015 Yes, it's normal to lie, cheat, and commit fraud. If you or the other party are caught, it's likely to get messy. Link to comment Share on other sites More sharing options...
charliebadenhop Posted September 18, 2015 Share Posted September 18, 2015 I would suggest that your really want to work with someone who knows how to do real estate transactions. Virtually no one pays tax on the actual sale price. 50-60% or more, below the actual sale price is common. The appraised value is also very definitely under inflated. Has been and likely will be, for quite some time. So I believe you are not concerned with the correct issues. Are you asking- Will the sale get rejected by the government because the listed sale price is too low? Not unless the seller puts down a really ridiculous price. SELLER is paying the taxes, so please explain what you are understanding as a potential problem. Link to comment Share on other sites More sharing options...
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