Approx tax and transfer fee for new house

[thinkless]

Hello,

 

My wife and I are planning to purchase land with a newly-built house on it from a developer. It will be in my Thai daughter's name. We've agreed with the developer to split the fees. According to the developer, the land tax is calculated according at THB 8,950 per tarangwa and the land is a total of 114 tarangwa = THB 1,020,300. He has told me that the all fees (taxes, stamps and transfer) will amount to 6.7% of that figure, and we will be responsible for paying half, or 3.35% (THB34,180)Does that sound about right to you? It seems high from what I've read online, but most of what I've read applies to foreigners buying condos.

 

Secondly, I would have thought that I would have to pay tax on the newly-built house, but he says paying the land tax is enough. He did mention though, that if I opted to pay house and land tax (baan prom tee din), the fees would amount to THB 83,750, or 3.35% of the purchase price of the house and land, which is THB 2,500,000. That sounds ridiculously high.

 

It seems we'd be saving a fortune by doing it the first way. I'm just wondering if there are any disadvantages to going the first route as opposed to the second? Am I missing something here?

 

Any guidance would be most helpful.

 

Thank you in advance.

Edited September 25, 2016 by thinkless

[helloagain]

Go with your thai gf to land office and find out the truth

[ronaldo0]

One of the taxes was around 1.5 -2 % before but seemingly it is now ramped up to 8% or something .The other tax is 1.5% from what I remember .

I would tell them if they want the sale they pay all taxes for you.

[helloagain]

Yes you can try that but it is always 50/50. I would never accept anything less if you insisted then icwould tell you to walk away. But thats me

[KamnanT]

The transaction will be subject to taxation on the total assessed value of the house and land (which in most cases is lower than the purchase price but need not necessarily be).  You can determine the assessed value by inquiring at the Land Titles Office for your district.  The taxes payable are:

 

1.  Land Transfer Tax: 2% of the assessed value.

2.  Stamp Duty (Property): 0.5% of the assessed value or declared purchase price, whichever is higher.

3.  Mortgage Registration Fee & Stamp Duty (if one is registered as part of the purchase):  1.05% of the mortgage amount

 

Who pays these taxes (the buyer or the seller) is subject to negotiation, however common practice for a new development is for the developer to absorb (1) and the buyer to pay (2) and (3).  But I have heard of other arrangements.  Clearly, whether or not you obtain a mortgage is your decision, so it's probably a bit much to expect the developer to pay for (3).

 

I suspect that the 6.7% figure might include the specific business tax (SBT) at 3.3%.  The buyer should not be paying this - it is a business tax levied on the developer/seller.

 

At the end of the day, the taxes are payable at the Land Titles Office when the transfer of title takes place.  Your daughter will need to be there and I suggest you attend as well.  All of the taxes should be itemised and receipted (there are a couple of small paperwork fees - no more than a couple of hundred baht).  You pay all of the taxes to the LTO, not to the developer.

[sandemara]

If the house is going to be in your Thai daughter (a Thai citizen?) name, isn't she the nominated purchaser>?  Why is your name/identity as a foreigner even involved?  Talk to a lawyer asap.

[baansgr]

Children are unable to purchase property directly however can own property if gifted from a relative. On the day of transfer the property will be transferred to your wife firstly then allowing her to assign the property in your daughters name incurring a 0.5% transfer fee of the value. Bear in mind property cant be mortgaged or sold until your daughter is of age at which point she can do what she wishes with the property. Transfer fees quoted from developer seems correct.

[KittenKong]

On 26/09/2016 at 5:21 PM, helloagain said:

Yes you can try that but it is always 50/50. I would never accept anything less if you insisted then icwould tell you to walk away. But thats me

 

It certainly is not "always 50/50". Vendors like to try it on, but that's all it is. And given that vendors outnumber buyers heavily, good luck with finding a replacement for your buyer once you have told him to walk away.

 

A bird in the hand is worth an entire flock in the bush.

[blackcab]

 

Have a chat with the Land Office. They are normally very helpful but also very busy. They will be able to pull up a screen on their computer like the attached picture, which will break down the fees in detail.