Introduction
Real estate transactions in Thailand come with a variety of taxes and fees that both buyers and sellers need to understand. Whether you’re selling a property at a profit or a loss, these taxes are mandatory and can significantly affect the overall costs of the transaction. This guide provides a clear and practical breakdown of the taxes and fees involved in property sales, along with examples of calculations to help you navigate the process.
These same costs apply when a structure is unwound rather than sold on the open market — a point that matters when a landholding company faces a disposal order and the transfer is not voluntary.
General Information
In Thailand, taxes and fees on real estate sales are not influenced by whether the seller makes a profit or incurs a loss. Sellers are obligated to pay these taxes regardless of the outcome of the transaction.
The total tax burden when selling real estate generally falls between 5–7% of the selling price, depending on factors such as:
• Duration of ownership
• Cadastral value (government-assessed value)
• Selling price
For property transactions, such as the sale of a condominium unit, the following taxes and fees may apply:
• Registration Fee
• Specific Business Tax (SBT) (if applicable)
• Stamp Duty (if applicable)
• Withholding Tax (Income Tax)
Taxes and Fees Overview
The table below summarizes the key taxes and fees for real estate sales and lease transfers in Thailand, including responsibility for payment:
| Tax/Fee | Real Estate Sale | Transfer of Lease Rights | Who Pays |
|---|---|---|---|
| Registration Fee | 2% of cadastral value | Not applicable | Shared between seller and buyer |
| Lease Registration Fee | Not applicable | 1% of total rental payments | Shared between lessor and lessee |
| Specific Business Tax | 3.3% (if applicable) | Not applicable | Seller |
| Stamp Duty | 0.5% (if applicable) | 0.1% of total rental payments | Seller |
| Withholding Tax | 1% (legal entity) or progressive rates (individual) | Not applicable | Seller |
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Detailed Explanation of Taxes and Fees
Registration Fee
- Real Estate Sales: A fee of 2% of the cadastral value is charged. This cost is generally shared equally between the buyer and seller, unless specified otherwise in the agreement.
- Lease Transfers: For registering lease rights, a fee of 1% of the total rental payments applies, typically shared between the lessor and lessee.
Specific Business Tax (SBT)
- When Charged:
- SBT applies to sellers who are legal entities or individuals selling a property held for less than five years.
- Exemptions:
- SBT does not apply to individuals who have used the property as their primary residence and have been listed in the house registration (ทะเบียนบ้าน) for at least one year from the date of acquisition.
- Other exemptions exist (e.g. inheritance, expropriation), but these are rarely applicable to foreign sellers.
- Amount: 3.3% of the higher of the selling price or cadastral value, inclusive of municipal tax.
- Who Pays: The seller is responsible for this tax.
Stamp Duty
- When Charged: Applicable only when SBT does not apply.
- Amount:
- For sales: 0.5% of the higher of the selling price or cadastral value.
- For lease transfers: 0.1% of the total rental payments.
- Who Pays: The seller typically bears this cost.
Withholding Tax (Income Tax)
- For Legal Entities: A flat rate of 1% of the higher of the selling price or cadastral value applies.
- For Individuals: The tax is calculated on a progressive scale, based on the cadastral value and duration of ownership.
Calculation of Withholding Tax
Step 1: Determining the Tax Base
The tax base is calculated using the following formula:
- Subtract the tax deduction (based on the ownership period) from the cadastral value of the property.
- Divide the result by the number of years of ownership.
- If the property was owned for more than 10 years, calculations cap the ownership period at 10 years.
- Partial years are rounded up to a full year.
Tax Deduction Table:
| Ownership Period (Years) | Tax Deduction (% of Cadastral Value) |
|---|---|
| 1 year | 92% |
| 2 years | 84% |
| 3 years | 77% |
| 4 years | 71% |
| 5 years | 65% |
| 6 years | 60% |
| 7 years | 55% |
| 8+ years | 50% |
Step 2: Determining the Tax Amount Using a Progressive PIT Scale
Once the tax base is established, the entire capital gain from the property sale is subject to the progressive Personal Income Tax (PIT) scale, with rates ranging from 5% to 35%, based on the seller’s total taxable income.
| Taxable Income (Baht) | Rate |
|---|---|
| 0 – 300,000 | 5% |
| > 300,000 – 500,000 | 10% |
| > 500,000 – 750,000 | 15% |
| > 750,000 – 1,000,000 | 20% |
| > 1,000,000 – 2,000,000 | 25% |
| > 2,000,000 – 5,000,000 | 30% |
| > 5,000,000 | 35% |
Step 3: Calculating the Final Tax Amount
The final tax amount is calculated by multiplying the annual tax amount (derived from the PIT scale) by the number of years of ownership.
Example of Calculating Withholding Tax
Scenario: Selling an apartment three years after purchase.
- Cadastral Value: 8 million baht.
- Tax Deduction Calculation:
- Deduction rate: 77%.
- Deduction amount: 8,000,000 × 0.77 = 6,160,000 baht.
- Determining the Tax Base:
- Tax base: 8,000,000 − 6,160,000 = 1,840,000 baht.
- Annual Income:
- Annual income: 1,840,000 ÷ 3 = 613,333 baht.
- Tax Calculation:
- On the first 300,000 baht @ 5%: 300,000 × 0.05 = 15,000 baht.
- On the remaining 313,333 baht @ 10%: 313,333 × 0.10 = 31,333 baht.
- Annual tax: 15,000 + 31,333 = 46,333 baht.
- Final Tax Amount:
- Total tax for 3 years: 46,333 × 3 = 139,000 baht.
Tax Calculation Summary Table:
| Description | Calculation | Amount (Baht) |
|---|---|---|
| Value | Cadastral Value | 8,000,000 |
| Deduction | 77% | 6,160,000 |
| Tax Base | 8,000,000 − 6,160,000 | 1,840,000 |
| Annual Income | 1,840,000 ÷ 3 | 613,333 |
| Annual Tax | 300,000 @ 5% + Remainder @ 10% | 46,333 |
| Tax Due | Annual Tax × 3 | 139,000 |
For further examples of WHT calculations, refer to the Land Department of Thailand’s website.
Example of Calculating All Taxes for an Apartment Sale
Suppose the apartment mentioned earlier is sold.
Scenario: Selling an apartment three years after purchase.
- Cadastral Value: 8 million baht.
- Sale Price: 10 million baht.
Buyer’s Expenses:
- Registration Fee: 80,000 baht.
Seller’s Expenses:
- Registration Fee: 80,000 baht.
- SBT:
- Rate: 3.3%.
- Calculation: 10,000,000 × 0.033 = 330,000 baht.
- WHT: 139,000 baht.
- Total Seller Expenses: 80,000 + 330,000 + 139,000 = 549,000 baht.
Practical Considerations
Contract Negotiations
The distribution of taxes and fees may vary depending on the terms of the contract. It is essential to clarify these responsibilities before signing.
Additional Costs
Sellers may also incur other costs, such as agent commissions, which should be accounted for when planning the transaction.
Special Incentives for Thai Nationals
Under a government stimulus measure effective until June 30, 2027, special provisions apply to property purchases by Thai nationals. For qualifying properties valued up to THB 7 million, the sale registration fee is reduced from the standard 2% to 0.01%. The mortgage registration fee is also cut from 1% to 0.01%, provided it is registered at the same time as the sale. These preferential rates are exclusive to Thai citizens.
Related Articles
Foreign Ownership and Property Rights in Thailand: Key Legal Options Explained
Leasehold in Thailand: What Foreigners Need to Know
Buying a Condo in Thailand: A Practical Guide for Foreigners
Personal Income Tax in Thailand: A Complete Guide for Expats and Residents
How We Can Help
Beyond taxes, a property transaction requires several legal steps. Our firm provides legal assistance with:
- Property due diligence
- Drafting and reviewing sale contracts
- The complete ownership transfer
Contact us to discuss legal services for your property deal.
