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Taxes in Thailand when buying, selling and owning property

Foreign real estate buyers continue to show great interest in Thai property, both in terms of investment and their own residence; when buying a home, all buyers have to deal with local taxes.
As you know, in Thailand there are two types of legal form of ownership of real estate: freehold – purchase of real estate in full ownership, leasehold – purchase of real estate on a rental basis for 30 years with the right to renew twice for 30 years, i.e. total ownership will be 90 years. If the owner of a property purchased in leasehold wants to sell it or inherit it, then the new owner of the property will again be entitled to 90 years of owning the property. Recently, for investment purposes, people are increasingly buying apartments in leasehold, since the final price of the apartment is much more profitable, because for freehold you will have to pay an average of 200,000 ($ 6,630) to 500,000 baht ($ 16,570), depending on conditions of the developer, but usually it is at least 6.3% of the value of the property and is divided in half between the developer and the buyer of real estate.

Taxes in Thailand

Immovable Property Tax
Not only our compatriots, but also buyers from all over the world are attracted by the fact that there is no real estate tax in Thailand – the same fee that is paid annually by owners of real estate in almost any country. However, in 2020, the Thai authorities plan to introduce this tax, but when it will come into force and with what conditions, it is still difficult to say. There is information that buyers of premium real estate worth over 50 million baht (approximately $ 1.6 million) will pay it – it will amount to 0.3% of the purchase amount. The introduction of a tax on the possession of second (third, fourth, etc.) real estate in the amount of 0.01% of the value of the property is also being discussed. However, so far there have been no official data on this in Thailand – everyone expects the onset of 2020.

Property Taxes
The tax on the acquisition of real estate in Thailand is paid only once when registering a transaction with the Land Department. The fee is 1.1% of the contract value of the apartment purchased in leasehold – the buyer shares it in half with the developer. Thus, in the end, it will be necessary to pay only 0.55% of the tax.

Currently in Thailand there are no annual taxes on housing in Thailand, but in any case, you will have to pay a transfer fee (transfer tax), which is 2% of the estimated value of the apartment. Also, 10,000 baht ($ 330) will go to pay a lawyer to prepare a contract. This amount may vary depending on the developer and the selected object.

When buying a home, a ginking fund (capital repair fund) is also paid once upon registration of the property. It affects those objects that are under construction (therefore, the secondary market, as a rule, does not have this additional payment). Depending on the project, the cost of paying tax is about 500-700 baht (16-23 dollars) per sq.m. At the same time, there are investment projects when investing in which this additional payment is not charged. Usually, for a studio of 30 square meters, about 400-500 dollars are paid once.

Taxes in Thailand

When buying a villa in leasehold, the foreigner draws up the building in full ownership and usually pays in full or half the transfer tax on the building (transfer fee), which is 2% of the appraised value of the apartment. The land is registered in a long-term lease, and the buyer pays a tax on registration of a lease agreement 1.1% of the contract value.

Regular expenses
The only annual additional payment in Thailand is the maintenance fee – a monthly fee that is paid one year in advance. Depending on the project, the cost of it is about 50-70 baht (1.6 – 2.3 dollars) per square meter per month – this amount is multiplied by 12 months and the result is the full amount of the fee. There are also investment projects when this payment is not charged during the guaranteed return on investment program. If we are talking about a studio measuring 30 square meters, then for the year the total utility payment will be 720 dollars. At the same time, there are always options to save: some developers cancel this payment for the first few years of ownership as a bonus for buyers.

When buying a home, the buyer is expected to pay the cost of installing meters for water and electricity – they are paid only once during the registration of the property and usually amount to about 20,000 baht (663 dollars). The costs of utility bills (water, electricity, internet) are paid upon consumption at the time when the person himself lives in the apartment. The cost of water consumption in Thailand is negligible – the average bill per person is 60 baht ($ 2) per month.

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