Condominium Transfer Tax and fees

Transfer tax, income withholding, fees, stamp duty, business tax are paid at the land office

CONDOMINIUM TRANSFER tax in Thailand is a tax imposed by the Thai government and paid at the local land office when transferring ownership of a condominium in Thailand. There are a variety of taxes and fees involved when transferring a condominium unit in Thailand; transfer fee, stamp duty, withholding tax (personal or corporate) and specific business tax (if applicable).

Transfer tax in case of a re-sale of an existing condo

Total transfer fees and taxes could range from a small amount to a relatively larger amount depending on the amount of income tax involved for the seller. Another variation of the transfer taxes and fees in case of a re-sale condominium relate to the agreement between the seller and buyer and how the buyer and seller of the condominium unit have agreed to share these costs.

Transfer tax and fees in a off-the-plan condominium project

Developing and selling new condominiums is a contract controlled business in Thailand and must comply with government regulations. One condition is that the buyer of a new unit or in an off-the-plan purchase of a condominium cannot be charged more than half of the 2% ownership transfer fee only. All other duties and taxes related to the registration and transfer of ownership must be borne by the developer. It is common that developers of condos in Thailand try to pass on transfer cost to the buyer for which they are by law responsible for.

How to divide the conveyancing costs of an existing re-sale condo

In the end, how these cost are split in a private sale and at what percentage depends on the bargaining power of the parties. As there is in a private sale no fixed rule or legal requirement how to split these costs it can vary from seller pays all to buyer pays all (which could include paying the seller's personal withholding tax). It is advisable for a purchaser of a re-sale condominium to clearly confirm with the seller in the condominium sale and purchase agreement who will be responsible for transfer fees and all taxes and/or at what percentage.

The local custom in Thailand in a private sale of a condominium is to divide the taxes and fees involved with the transfer of a condominium as follows:

* Stamp duty does not have to be paid is specific business tax is paid. Withholding tax is fixed at 1% if the seller is a corporation, for individuals this is charged at a progressive income tax rate. Some specific exemptions on condominium transfer fees and taxes may be applied based on the number of years of possession of the condominium and if specific business tax is paid by the seller.

 ** Withholding tax (retention tax): if the seller is a company withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher), if the seller is a private person withholding tax is calculated at a progressive rate based on the years of ownership and appraised (government assessed) value of the property. Under Thai tax laws the land office must take the income withholding tax at the time of transfer, even if the the seller of the condo is a foreigner who is a resident in a different jurisdiction.

Sample clause Condominium SPA

Sample existing condo transfer tax calculation in Thailand

Condo transfer taxes and fees relate to the transfer of ownership of a condominium unit. In case of obtaining a registered long term leasehold interest in a condominium there are lease registration fees of 1,1% over the total rental involved and rental income from renting out the condo is subject to personal income tax.

The Thailand transfer sample tax and fees indication below is based on the transfer of a condominium apartment unit in Thailand with an appraised and registered sale value of 5 million Thai Baht and 3 years of ownership by the current owner. Approx transfer tax and fees of a condo in Thailand (value of 5 million):

1. Transfer fee 2% over 5,000,000 THB = 100,000 THB
2. Specific Business Tax Local Tax 3.3% = 165,000 THB
3. Individual Withholding Tax approx 100,000 THB
4. Application fee and others approx. 300 THB