Taxes and Fees When Buying a Condominium in Thailand: Who Pays What and How Much

What the Buyer Faces

A condominium transaction in Thailand does not close before a notary but at the Land Office with jurisdiction over the property. That is where ownership is transferred and all taxes and fees are assessed simultaneously. Until the payments are made, the registrar will not record the transfer of title to the new owner, so understanding the cost structure in advance is essential - it has a direct bearing on the final transaction price.

There are four payments in total: the transfer fee, the Specific Business Tax (SBT), stamp duty, and withholding tax on the sale. A key feature: the base for most of these is not the contract price but the appraised value set by the government.

The Appraised Value as the Tax Base

The Land Office maintains its own appraised value table and revises it approximately every four years. This figure is often noticeably lower than the actual market price. Different rules apply to different payments:

• The transfer fee is calculated strictly on the appraised value.
• SBT and stamp duty are calculated on whichever is higher - the appraised value or the actual sale price.
• Withholding tax is based on the appraised value, adjusted for the period of ownership.

The appraised value of a specific unit can be checked in advance at the same Land Office, which allows costs to be calculated precisely before signing.

The Four Payments in Detail

Transfer fee - 2%. The basic charge for registering the transfer of title. By custom the parties split it equally, but the allocation can be modified by agreement. For new developments the law protects the buyer: the developer may not pass on more than half of this fee, and must bear the remaining taxes itself.

Specific Business Tax (SBT) - 3.3%. This applies when a sale is considered commercial in nature. The key criterion is the period of ownership: if a private individual sells a unit within five years of acquiring it, the transaction is treated by default as a sale of real property for profit, and the tax is charged. Under the law the seller pays it.

Stamp duty - 0.5%. Charged to the seller, but only when SBT does not apply in the transaction. The two charges are mutually exclusive: either the 3.3% business tax or the 0.5% stamp duty applies - never both at the same time.

Withholding tax on the sale - 1% or progressive scale. For companies, a flat 1% is withheld on the appraised value. For individuals the calculation is more complex: a progressive scale is applied taking the period of ownership into account, so the final amount depends on how many years the unit was held.

The Five-Year Rule

The period of ownership is the primary factor affecting the tax burden. The logic is as follows:

• Sale within the first 5 years (individual seller): SBT of 3.3% applies; stamp duty is not charged.
• Sale after 5 years (individual seller): SBT does not apply; stamp duty of 0.5% is charged instead.
• Any sale by a company: SBT of 3.3% is charged regardless of the period of ownership.

For the buyer this means one straightforward thing: if the seller has owned the unit for fewer than five years, or is selling as a legal entity, the tax burden on the transaction is higher. This is worth bearing in mind when negotiating who absorbs which share of the costs.

Summary Table

Sample Calculation

A unit priced at THB 5 million, owned by a private individual for 3 years (that is, fewer than five years):

• transfer fee 2% - THB 100,000;
• SBT 3.3% - THB 165,000;
• withholding tax (individual) - approximately THB 100,000;
• registration fee - approximately THB 300.

Total approximately THB 365,000. Stamp duty is not charged here because SBT applies. Had the same seller owned the unit for more than five years, SBT would have fallen away and stamp duty of 0.5% (THB 25,000) would have been charged instead - the overall burden would have been substantially lower.

When Taxes Do Not Arise

A transfer of title without consideration is generally not subject to business tax. This applies to inheritance and gifts of real property to legitimate children - such transfers are processed under separate rules. If, however, a unit passes from parents to children through a standard sale-and-purchase transaction, the standard rates apply.

Relevance to Purchase by a Foreign Buyer

These payments do not depend on the buyer's nationality, but they arise only when ownership is registered through lawful channels. A foreign national may hold a unit on a freehold basis within the 49-percent foreign-ownership quota established by the Condominium Act, and for registration will need proof of foreign-currency remittance - the Tor Tor 3 form (FET form) issued by a Thai bank. Without it the Land Office will not register ownership in a foreigner's name, which means there will be nothing against which the taxes described above can be paid.

What to Check and Watch Out For

• Establish the appraised value of the unit at the Land Office in advance - most payments are calculated from it.
• Find out the seller's period of ownership: fewer than five years means SBT at 3.3% instead of stamp duty at 0.5%.
• Check the seller's status: when the seller is a company, SBT always applies.
• Record in the contract who bears which payment - the default custom is not binding.
• For a new development, verify that the developer is not passing on more than half of the transfer fee to you.
• Budget for the full amount of taxes - registration will not proceed until they are paid.
• As a foreign buyer, arrange the currency remittance and Tor Tor 3 form in advance to avoid derailing the registration.