Khun Jean Posted April 6, 2017 Share Posted April 6, 2017 I often wonder about the need for Thai people to lie about the sale price of property. The transfer fee is based on the appraised value as is the witholding tax. Only the stampduty or special business tax use the real sale price. The stampduty is 0.5% so lying doe snot have much effect. The special business tax is 3.3% so only there it makes a reasonable difference. But would in most cases this difference not be small compared to the total amount? Would you lie? Is it worth more for agents/brokers/.businesses? Link to comment Share on other sites More sharing options...
trogers Posted April 6, 2017 Share Posted April 6, 2017 Your accusations are based on the wrong assumptions. You used the term 'appraised value' without it's proper definition. Appraised to what? Has Thailand an army of trained govt appraisers who are sent out to value properties, differentiating between shoebox units that are plainly finished and those with gold plated showerheads and diamond studded door frames? So, when lacking appraisers and not having viewed the interior of the properties, appraised values can only be based on the yard stick of plain finished...with inflation on land and replacement costs. Link to comment Share on other sites More sharing options...
juehoe Posted April 7, 2017 Share Posted April 7, 2017 Thais don't like to pay taxes. I had to change my lawyer because he wasn't willing to make a tax invoice for his fees.This lawyer has a business but doesn't pay taxes...Sent from my iPhone using Thaivisa Connect Link to comment Share on other sites More sharing options...
Khun Jean Posted April 7, 2017 Author Share Posted April 7, 2017 (edited) When at the land office the 'appraised value' can be requested for any chanot. Each four years the value is adjusted. Often the 'appraised value' is much lower then the sale value. The 'lying' is often to use this appraised value or close to it instead of the real sale price. I heard that most of Bangkok is already done per chanot, and in the provinces it is done by grouping chanotes in zones. An interesting page is http://rdsrv2.rd.go.th/landwht/landwht06_1.asp and there is a calculator (http://rdsrv2.rd.go.th/landwht/formcal1.asp which has an interesting 'search button' that leads to a page where values of land plots can be searched. (Although it does not work all the time). Edited April 7, 2017 by Khun Jean Link to comment Share on other sites More sharing options...
Morch Posted April 7, 2017 Share Posted April 7, 2017 I think the main thing is Thais aren't into paying taxes. There's a similar phenomenon with regard to appraisals/declarations of income tax. Sure, it may seem like small change for some, but for most Thais that's not the case. A few thousand bahts still counts. The difference between appraisal and actual price paid can also be used to thwart nosy neighbors, dept collectors and family members who feel they didn't get their fair share out of the sale. Link to comment Share on other sites More sharing options...
renevanb7 Posted April 7, 2017 Share Posted April 7, 2017 You pay most of the transfer costs over what is higher, the sale/buy price or the price set by the land office/revenue office. It's illegal to mention not the right sale/buy price (but who cares about it). The sale/buy price set by the land office/revenue office is mostly lower. Link to comment Share on other sites More sharing options...
boonchu Posted April 7, 2017 Share Posted April 7, 2017 The land office doesnt make valuations on the house or its standard of finish. It is on the land and area that the land is located. Link to comment Share on other sites More sharing options...
Stevemercer Posted April 7, 2017 Share Posted April 7, 2017 The Government appraised price for land in rural areas is often a quarter to half of the actual sale price. Most government appraisals (in any country) will be well below actual sale prices. I presume the methodology used favours the government in case they have to resume or buy land. Of course, if rates or annual tax is payable (particularly for improved properties), a different methodology is used to ensure the appraised value is higher than actual sales so as to maximise returns to the government. Link to comment Share on other sites More sharing options...
spacebass Posted April 7, 2017 Share Posted April 7, 2017 Short answer to the question is : Yes. Link to comment Share on other sites More sharing options...
khunPer Posted April 7, 2017 Share Posted April 7, 2017 Thais, like most other people, don't like to pay taxes – the difference is, that coming from a "civilized" country, we think 1-3 percent is utterly cheap. Some Land Departments use their appraised value for tax and transfer fee, others wish to see documentation for the actual trade price (that's were some perhaps are lying). In cases when appraised value is used, one part, or a real estate agent, will often check with the Land Office, so everybody is prepared what to pay when doing the transfer; i.e. normal procedure with seller paying tax, and buyer paying transfer fees. I have experienced both types of Land Departments, i.e. use the Land Department's value, and a Land Department claiming proof of trade-price. After Thai Law, to my knowledge, seller shall also pay normal income tax – or company tax – of the sales profit; there are however some deductions for length of ownership, which an accountant can calculate. The income tax, depending of profit level, can be as high as 35 percent... Link to comment Share on other sites More sharing options...
Dumbastheycome Posted April 7, 2017 Share Posted April 7, 2017 Yes. Always an attempt is made to specify a sale price well below the actual in a vain attempt to avoid the transfer fee based on same. In the past it was accepted but now an appraised value on the land is made to establish the transfer fee basically because of the lies. It is a tax rather than a fee so it can be understood why there is an attempt at avoidance. Link to comment Share on other sites More sharing options...
Suradit69 Posted April 7, 2017 Share Posted April 7, 2017 10 hours ago, juehoe said: Thais don't like to pay taxes. That's amazing. Everyone else in the world loves paying as much taxes as they can. Tax havens, cash transactions for tax avoidance, trillions of dollars not repatriated until tax concessions are enacted, tax evasion ... all those things are actually Thai in origin. Link to comment Share on other sites More sharing options...
Dumbastheycome Posted April 7, 2017 Share Posted April 7, 2017 Just now, Suradit69 said: That's amazing. Everyone else in the world loves paying as much taxes as they can. Tax havens, cash transactions for tax avoidance, trillions of dollars not repatriated until tax concessions are enacted, tax evasion ... all those things are actually Thai in origin. LMAO ! Link to comment Share on other sites More sharing options...
amjamj Posted April 7, 2017 Share Posted April 7, 2017 Hello, Can we go to land office and ask the appraised price of a condo or house ? Thanks. Link to comment Share on other sites More sharing options...
Khun Jean Posted April 7, 2017 Author Share Posted April 7, 2017 From what i understand the assessed value of the land is what is used for determining the transfer fee (buyer) and the withholding tax (seller). The Special Business Tax (seller) or when owned for more then five years the stamp duty (seller) is based on the actual selling price. When land is owned more then five years the difference in what have to be paid is only 0.5% over the difference between the real and assessed value. As such it should only be a small amount, maximum in the 10's of thousands. How is income tax determined? Is it based on profit (difference between the price you bought and are now selling) or just on the assessed value? The withholding tax is determined using the assessed value. This could then be higher or lower then the taxes over the real income and you should be able to get a refund if the withholding tax was too high. Link to comment Share on other sites More sharing options...
trogers Posted April 8, 2017 Share Posted April 8, 2017 12 hours ago, amjamj said: Hello, Can we go to land office and ask the appraised price of a condo or house ? Thanks. Yes. But only useful for knowing the amount of taxes and duties payable in the event of a sales. The assessment value does not take into consideration the state of the condo or house, nor the interior. Link to comment Share on other sites More sharing options...
Dumbastheycome Posted April 8, 2017 Share Posted April 8, 2017 On 4/7/2017 at 10:48 PM, Khun Jean said: From what i understand the assessed value of the land is what is used for determining the transfer fee (buyer) and the withholding tax (seller). The Special Business Tax (seller) or when owned for more then five years the stamp duty (seller) is based on the actual selling price. When land is owned more then five years the difference in what have to be paid is only 0.5% over the difference between the real and assessed value. As such it should only be a small amount, maximum in the 10's of thousands. How is income tax determined? Is it based on profit (difference between the price you bought and are now selling) or just on the assessed value? The withholding tax is determined using the assessed value. This could then be higher or lower then the taxes over the real income and you should be able to get a refund if the withholding tax was too high. Is the transfer fee (buyer), withholding tax (seller) independant of the Special Business Tax and applied to Business only? Would appreciate being pointed to an English language site that explains it all. Link to comment Share on other sites More sharing options...
Khun Jean Posted April 9, 2017 Author Share Posted April 9, 2017 The best site in my opinion is https://www.samuiforsale.com/knowledge/real-property-transfer-taxes-and-fees.html Lots of other ages with solid info. Link to comment Share on other sites More sharing options...
anon4546543 Posted April 20, 2017 Share Posted April 20, 2017 My wife earlier purchased some land in a rural area. When the chanote was done and fees paid for, she received the government forms which state the price paid for the land, the government valuation of that land and the tax due based on the valuation. Link to comment Share on other sites More sharing options...
John Singer Posted April 21, 2017 Share Posted April 21, 2017 What implications could an understated purchase price have for the buyer? Current withholding tax does not take the historical purchase price into consideration. Not reading the news regularly, the government is in the process of revamping land and property taxes. Could we see a move to an internationally more common scheme where tax is paid on the difference between selling and historical purchase price? Link to comment Share on other sites More sharing options...
trogers Posted April 21, 2017 Share Posted April 21, 2017 2 hours ago, John Singer said: What implications could an understated purchase price have for the buyer? Current withholding tax does not take the historical purchase price into consideration. Not reading the news regularly, the government is in the process of revamping land and property taxes. Could we see a move to an internationally more common scheme where tax is paid on the difference between selling and historical purchase price? I doubt it. As you have mentioned, prices can be still be understated, historical and present. The new tax system would still be based on the assessment value of the Land Dept. Link to comment Share on other sites More sharing options...
The Deerhunter Posted April 21, 2017 Share Posted April 21, 2017 Simple. Land transfer taxes, payable by the seller are calculated on the price te land was sold for. Lie the sale pricedown. Pay less tax. Link to comment Share on other sites More sharing options...
Khun Jean Posted April 21, 2017 Author Share Posted April 21, 2017 4 hours ago, The Deerhunter said: Simple. Land transfer taxes, payable by the seller are calculated on the price te land was sold for. Lie the sale pricedown. Pay less tax. Where did this info come from? Land transfer taxes which are normally payable by the buyer is not based on the sale price. Only the SBT/Stamp duty is based on the sale price. Hence lying about the sale price makes very little difference overall especially when the land was owned by the seller for 6 years or longer. Link to comment Share on other sites More sharing options...
trogers Posted April 22, 2017 Share Posted April 22, 2017 Assessment value of land depends on its location, while value of the building is the same nationwide. http://www.ddproperty.com/th/ข่าวอสังหาริมทรัพย์-บทความ/2017/4/151076/location-will-matter-for-land-tax-but-building-tax/?utm_source=pgth-newsalert&utm_medium=edm&utm_campaign=dailynews-21Apr2017&utm_content=links Link to comment Share on other sites More sharing options...
The Deerhunter Posted April 24, 2017 Share Posted April 24, 2017 On 4/22/2017 at 9:56 AM, trogers said: Assessment value of land depends on its location, while value of the building is the same nationwide. http://www.ddproperty.com/th/ข่าวอสังหาริมทรัพย์-บทความ/2017/4/151076/location-will-matter-for-land-tax-but-building-tax/?utm_source=pgth-newsalert&utm_medium=edm&utm_campaign=dailynews-21Apr2017&utm_content=links In our office they ask the vendor how much he sold for and the date of sale. Of course all sales are years in the past and all at old low low prices. Anybody surprised???? Link to comment Share on other sites More sharing options...
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