Property Buyers' & Sellers' guide
A1: For condominium property, condominium units are available on freehold basis for both Thai and non-Thai buyers. Current Thai law allows non-Thais to purchase up to 49% of the condominium’s saleable area on freehold basis. For the remaining units, foreign buyers may purchase them on renewable leasehold basis (Currently, the lease is offered at a maximum period of 30 years as permitted by law) and are renewable, subject to the agreement with developer.
A2: For non- condominium property, either apartment units or different types of houses built on land property, currently (As of 2021), non-Thais are prohibited to acquire land on freehold basis. For foreign buyers, land is available on leasehold basis. Same as the leasehold condominium, lease agreement is to be signed by lessor and lessee, and to be registered at the government’s department of lands. This process makes the leasehold rights secure. The building, which is the house itself, foreign buyers are able to purchase on freehold basis.
In another word, non-Thais are entitled to own the freehold buildings developed upon the land that leased by them, but not the land itself.
A: Yes, leases may be transferred subject to the terms and conditions of the lease agreement. Generally, a small fee is payable. In addition, the new owner must agree to be bound by the terms and conditions contained in the original lease agreement.
A: Yes, Once the lease is registered at the Department of Lands, one of Government offices, the owner’s rights to the property will be officially recognized.
A: These are explained below:
- Leasehold registration fees and stamp duty
- For Leasehold Apartment/ Leasehold Condominium
- For Leasehold Land
As of 2022, the rate is 1.1% of the rental or lease premium of the apartment/ land value. This fee is payable to the Department of Land upon registration of the lease, either when the first purchasing (First lease registration) and every time of lease renewal (For example, to renew the lease after 30years lease expired, for a new 30 years lease)
- Freehold registration fee
- For Freehold Condominium
- For Freehold Land (Under Thai company)
As of 2022, the 2% of the official appraised value of building/ land irrespective of the contracted sale price is payable to the Department of Land upon transferring/ registration of ownership of the buildings or land. The appraisal price is calculated relative to the government’s tax assessment value. The main contact to check the land assessment value is The Treasury Department.
Other applicable taxes upon transfer and registration of ownership of the freehold house building/ condominium are
- Specific Business Tax (SBT) is payable by all companies and those individuals who hold the property for less than 5 years. (As of 2022, the rate is 3.3% of the contracted sale price or appraisal value, whichever is higher) An individual is also exempt from SBT if the property has been used as the principal place of residence of the seller whose name must also appear on the household registration certificate for at least one year.
- Stamp Duty: This fee is only payable where SBT is not applicable and, in the case of a sale of property, it is based on 0.5% of the official appraised value or the contracted sale price, whichever is the higher. Where leasehold land is being transferred, stamp duty is payable on the remaining value of the lease.
- Corporate Income Tax: Where the seller is a company, both Thai and foreigner, as of 2022 the rate is 1.0% of the selling price or appraisal price, whichever is higher, upon the registration of the transfer of the unit.
- Witholding Tax (WHT): Where the seller is an individual, the WHT is based on the individual’s marginal tax rate (except that the first Baht 150,000 is taxed at 5% instead of allowing the tax-free threshold) after deducting from the official appraised value a standard deduction based on the number of years of ownership.
Where the seller is a company, the WHT is at 1% of the Land Department’s official appraised value or the contracted sale price, whichever is higher.
Note: Applicable registration fees and tax rates are current but may be subject to change by the relevant Thai authorities.
A: These are stated on the below table:
Category | Sale of freehold Land & Property | Transfer of Leasehold Land or Property | Sale of Building | Liability |
Transfer Fee | 2% | N/A | 2% | Seller/ Buyer |
Lease Registration Fee | N/A | 1% | N/A | Lessor/ Lessee |
Specific Business Tax (SBT) | 3.3% or N/A | N/A | 3.3% or N/A | Seller |
Stamp Duty | 0.5% or N/A | 0.10% | 0.5% or N/A | Seller |
Witholding Tax | 1% or 5 – 35% | N/A | 1% or 5 – 35% | Seller |
Note:
- The burden between the seller and the purchaser for the above costs will normally be specified in the Lease and/or Sale & Purchase Agreements.
- For new property by developers, both registration fees will be paid by lessee/ buyer, as stated in lease/ purchase agreement. Income property taxes will be paid by lessor/ seller. However, some resale transactions, both parties might agree to split registration fee, or even all the costs equally, based on mutual consent.
Disclaimer: The information contained, and views expressed, in this publication are for general guidance only. No responsibility is accepted for any errors or omissions, however caused, that this publication may contain or for any losses sustained by any person as a result of reliance on any information contained therein.