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Land Office Costs

Last updated: 23 Feb 2023
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Land Office Costs

In Thailand, registration of most transactions relating to immovable property (i.e., land, houses, and condominiums) must be done at the relevant land office, with fees varying based upon the type of registration. In this post, we have prepared a list of the land office fees associated with the most frequent property transactions in Thailand, along with an explanation of what each fee entails.

1. TRANSFER OF PROPERTY
1.1  TRANSFER FEE
Officially known as the registration fee, the Land Department collects a fee at a rate of 2% of the property's appraised value. Even though the legislation specifies that the transfer fee must be divided equally between the parties, in practice the fee might be negotiated by the parties in relation to any individual transaction. For instance, the parties may agree that the seller will pay the entire transfer fee. Notably, in the event the transfer is a gift or the property is an inheritance, the transfer fee is lowered to 0.5% if the transaction is between ascendants and descendants or spouses.

1.2  RETENTION OF INCOME TAX
Since the seller may earn a profit from the sale of any property, he or she will be subject to income tax. The seller will be required to pay the tax and other fees in advance at the land office. To determine the amount of income tax due, it is necessary to consult the Internal Revenue Code. Additionally, the length of ownership influences the amount of income tax owed by any seller.

1.3  SPECIAL BUSINESS TAX (SBT)
Certain transactions, including the sale of immovable property, are subject to a special business tax (SBT) under provisions of the Revenue Code. SBT is assessed at a rate of 3.3% of the higher of the appraised value or the selling price. In most cases, the selling price exceeds the appraised value because it is the amount agreed upon by the seller and buyer. SBT is not applicable if the property has been owned for longer than five years. SBT is typically paid by the seller, however, alternative terms may be agreed upon. Transfers made without consideration to a legitimate child and transfers of an inheritance to a statutory heir are exempt from SBT. If SBT applies to the transaction, stamp duty is not required.

1.4  STAMP DUTY
Stamp duty is a tax imposed by the Revenue Code on particular transactions, in this case the transfer of immovable property. The amount of stamp duty payable is 0.5% of the higher of the appraised value or the selling price. Typically, the seller is responsible for stamp duty, however this can be altered by agreement.

2. LEASE
Under Thai law, any lease of at least three years must be registered with the land office. In Thailand, long-term rentals are a popular option for expats wishing to stay in the country for extended periods. The registration charge is one percent of the rental fee for the duration of the rental. For instance, if a landlord and tenant agree to rent a property for 30 years at a monthly rate of THB 5,000, the total rental charge for the duration of the lease would be THB 1,800,000. The filing fee in this scenario would therefore be 18,000 Thai Baht.

Unlike ownership transfers, lease registration is not subject to withholding income tax and SBT. Nonetheless, stamp duty is still applicable, but at a rate of 0.1%.

3. USUFRUCT
Usufruct is a property right that gives the right holder, also known as the usufructuary, the ability to own (on a limited basis), use, and enjoy the property. After unlimited ownership, usufruct is the second most significant property right. In contrast to a lessee, a usufructuary may sublease the property without the owner's permission. The only privilege a usufructuary lacks is the right to sell the property. Usufructs are popular options for foreign nationals prevented from owning property outright by provisions of Thai law.

The cost of registering a right of usufruct varies depending upon its nature. The registration fee for granting a right of usufruct to a usufructuary without payment or consideration is as low as THB 50 per plot of land. Stamp duty, income tax withholding, and SBT are not applicable to this type of registration.

The registration fee for a right of usufruct with consideration is one percent of the agreed-upon amount of consideration. This method of registration is subject to a 0.5% stamp duty fee, but no withholding income tax or SBT is imposed.


TYPES OF REGISTRATION/TYPES OF COSTSREGISTRATION FEEWITHHOLDING INCOME TAXSBTSTAMP DUTY
Transfer of Ownership2%Subject to income tax under the Revenue Code3.3%0.5%
Rent1%--0.1%
Usufruct (without consideration)THB 50 / plot---
Usufruct (with consideration)1%--0.5%

 

Please feel free to contact us for advice on, or assistance with, any of the above issues. We are experts in the area of real property (real estate) transactions, with many years of practical experience.

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