Is "Buyer pays 100% transfer fee" legal ?

[plus7]

Hi,

I've read several pages in Internet. They all say if I buy property from the developer I must pay only 2% from appraised value.

However developer charged me the whole amount completely ~ 11%

I found that recently and asked for partial refund. The developer said, that charge is legal because contract says "transfer fee is 100% on buyer".

From what I understood, this is legal for private purchase, but not for purchase from the developer initially.

Could you please point me to the law ? I can't really find the right reference.

[beachproperty]

Don't know what law to point you to. The contract stated "transfer fee is 100% on buyer". Should have read the contract. Is there a difference between a "private purchase" and one with the developer? I think NOT!

[worgeordie]

If the contract you signed said ,you have to pay 100% of transfer fee,

you have to pay it,which is what you have done,now you try to reclaim

some of your money,never going to happen,you better read the contract

again VERY CAREFULLY,to see what else you have signed for.

regards worgeordie

[plus7]

worgeordie, beachproperty,

If there is a law that protects me, then this part of contract is invalid and void. No matter if I signed it and earlier agreed. I believe in your home countries there are such things as well.

[blackcab]

worgeordie, beachproperty,

If there is a law that protects me, then this part of contract is invalid and void. No matter if I signed it and earlier agreed. I believe in your home countries there are such things as well.

You are not in the West anymore. Stop thinking the law is there to protect you.

It's really simple. You signed a contract saying you would pay 100%. That's it. Done. Finished.

If you want to negotiate, do that before you hands over the money.

You have been told the same thing by several people, but you do not want to listen.

[beachproperty]

worgeordie, beachproperty,

If there is a law that protects me, then this part of contract is invalid and void. No matter if I signed it and earlier agreed. I believe in your home countries there are such things as well.

There is NO law that protects you in the US nor I believe anywhere else. On what basis would it be?

Your contract is VERY CLEAR....."Transfer fee is 100% on Buyer"

[Minnehaha]

OP, you say the contract reads "100% of transfer fee is paid by Buyer".

The Transfer Fee is 2% presently.

You also said this amounts to effectively 11%.

So, 11% of what? It would be curious if the assessed value exceeds the purchase price. Typically the purchase price is much higher and then typically the assessed value catches up over time. (a long time).

The Transfer Fee is calculated at the Land Office on the date of Transfer. It is 2% of the assessed value.

The assessed value is given by the govt. and can be checked by calling the correct office. Number is easily found. It is also online.

[plus7]

Minnehaha,

Yes, exactly what I meant! Total amount on the receipt from the land office is about 140.000, but the sum related to "transfer fee" is only 24.000

Beside the transfer fee it includes various taxes for the developer and it is not called "transfer fee". So, I'm looking for a refund of 116.000 baht.

Assessed value is also on the receipt and looks reasonably lower than the price.

Edited June 15, 2016 by plus7

[little mary sunshine]

Yes, only if you are dumb enough to put

This in your contract.

[AlQaholic]

When purchasing an off-plan condo or house in an official licensed housing or condo development the developer may only pass up to half of the transfer fee (2%) to the purchaser. Under consumer protection laws the developer is responsible in full for specific business tax and income withholding tax and at least half of the 2% transfer fees charged by the land office for ownership registration.

[Minnehaha]

Minnehaha,

Yes, exactly what I meant! Total amount on the receipt from the land office is about 140.000, but the sum related to "transfer fee" is only 24.000

Beside the transfer fee it includes various taxes for the developer and it is not called "transfer fee". So, I'm looking for a refund of 116.000 baht.

Assessed value is also on the receipt and looks reasonably lower than the price.

the menu of fees and taxes included on sale of a property in Thailand is better addressed in other sources - any of the Big 5 have these. Also CBRE has a good published 5 page document that outlines them all and the math. Google is best used for this. I will include an overview here.

Assessed Value is used for some math, Sale Price is used for others.

- Transfer fee is 2% assessed value / sale price, whichever is higher

- Stamp Duty is .5% sale price or assessed value whichever is higher

when the owner of a condo sells their property to another person, these are the 2 that are often split or negotiated between buyer and seller.

- Income tax is calculated using assessed value and a graduated tax scale based on years of ownership, so applies specifically to the Seller. Like anything, who pays this money can be agreed in contract by 2 consenting parties (in theory). Thai contract law is liberal in this sense. Also, it does not apply to business - only to individuals. For business it is a flat 1%.

- Special Business Tax is 3% and is owed by Seller when the property is sold after less than 5 years ownership, unless the owner has registered their Tabien Baan at the address. After 5 years this tax falls away.

PM me if I can help. Gratis, of course.

[gandalf12]

The national laws would normally override anything written by a company into a contract. however, as the laws here seem to change according to individual whim and as always if taken to court the Thai would have the upper hand from the start I would say forget the money as it has gone and you wont get it back.

From what I have seen in many things there is one set of laws for locals and a totally different set for the rest of us. Having said all of that it is for the individual to fully read any contract before signing and if you are unsure to consult a lawyer for clarification.

Edited June 15, 2016 by gandalf12

[GreasyFingers]

This site may help you

https://www.samuiforsale.com/knowledge/overview-property-law-thailand.html

[jippytum]

Caveat emptor ' 'Let the buyer beware ' applies in this case . The time to negotiate a lower percentage of the fee was at the time before signing the contract . However i do feel you may have been subject to an unfair [ not illegal ] clause in the small print.

[gios50hk]

Sorry plus7 - but like everyone else on this forum has said, you should have carefully read the contract first ok.

You cannot re-negotiate a contract once it has been signed. The only way to do that, is to have the contract annulled or replaced (by mutual consent of both parties) by a new one. Obviously, that is not possible in your case and I am sure that the developer would not be agreeable to that in any event.

Your argument that 'retrospective' alterations to contracts can be done in the West sound a little unlikely to be honest - but this may be possible if there are clear ambiguities, iniquities or errors with the contract. Even so, this is Thailand and normal standards or ethics do not apply. In fact, even IF you have a contract it is highly unlikely that it will protect you in the event of a dispute with the other party or that any form of compensation etc can be enforced.

As the old saying goes - 'Caveat Emptor' - and you really have no legal or moral case against the developer.

Edited June 15, 2016 by gios50hk

[rawhod]

I think a close inspection of the wording in the contract is called for.

If the contract states "All transfer fees to be paid by the purchaser", then you are probably stuffed.

If the contract states "Name transfer fee to be paid by the purchaser", or similar, then you should have been liable only for the 2% "Name Change Fee".

Edit: Just a thought, if the contract has a Thai version, get a good translation.

Edited June 15, 2016 by rawhod

[tomwct]

Everything is negotiable for any sales contract. If the developer tells you to pay XY&Z, you say I will only pay XXX or walk away! Negotiate, but don't buy anything if you don't understand.

[thairay]

go at it, contract a lawyer and if you lose ask for your money back, or a bit of it as life is not fair..

[khunPer]

To my knowledge, there is no Law about who pays what, it's up to negotiation; but normal practice is that sellers pays Tax and buyer pays Tranfer Fee at Land Office. If my memory serves me right, the transfer fee is a few percent – used to be around 1 percent, but may have gone up, think to remember 1.1% when I last transferred land a few years back – based on either the value recorded at Land Office, or at actual documented sales-prices; variates from province to province.

If you have signed an Agreement about who pays what, and how much (percentage?), then I think that shall be legal; however 11 percent sounds like a huge lot...

[Ulic]

As I understand it the transfer fee is 2%. So paying 100% of transfer fee is 2%. I think you

were fully scammed. Now the chance of you getting any money back once you have paid

are slim and none. What ever you do don't throw good money after bad. If you engage

a lawyer offer a 50% contingency fee of recovered money. If he is unlikely to recover any

money he will be unlikely to take the case and you will know exactly where you stand. I

think you are out of luck. Sorry dude.

[Keesters]

This is just one of those things that developers get up to today to make the property look cheaper than it really will be. The same as building houses without water tanks & pumps knowing that water supply is erratic at best.

30 years ago when I bought my house I paid nothing above the contract price. No taxes, no utility meter installation charges etc. Developer said it was all included. Times have changed.

[smutcakes]

Normally payment of transfer fees is a negotation point.

SBT and WHT/SD are seller taxes.

Whether the buyer or seller pays is irrelevant really as the seller will have factored all into their sales price.

You signed a contract accepting to pay 100% so little you can do. You are likely to spend more than the 100K you want to reclaim trying to fight a unwinnable case in lawyers fees.

Just suck it up and I am sure you will read contracts more carefully before signing going forward.

[plus7]

I've got refunded 100k baht, but claimed 250k.

I had to spoke with the developer boss (previously spoke with boss of sales office), he agreed the amount were taken incorrectly and told to accountant recalculate but also include all possible fees for late payments. I do not agree with all of them, but it is more or less ok.

You might be surprised, but they do return money sometimes. Even if in my case the transfer was 2 YEARS AGO. Luckily I kept all receipts and invoices.

Edited June 21, 2016 by plus7

[BEVUP]

Yep have to agree before signing

& you could have done this home work prior

Wife bought 3 mill property & fees 50 perc of all (like i hear in most cases)

Developer owned land for 11 yrs

We paid 50,000

[blackcab]

I've got refunded 100k baht, but claimed 250k.

I had to spoke with the developer boss (previously spoke with boss of sales office), he agreed the amount were taken incorrectly and told to accountant recalculate but also include all possible fees for late payments. I do not agree with all of them, but it is more or less ok.

You might be surprised, but they do return money sometimes. Even if in my case the transfer was 2 YEARS AGO. Luckily I kept all receipts and invoices.

Well done on getting something back. I have to say I didn't expect that.