Taxes and Fees on Property Transfers in Thailand: Who Pays What and How Much

What Makes Up the Cost of a Transaction

When ownership of land, a house, or a condominium changes hands in Thailand, the transfer is registered at the local Land Office. All mandatory payments are assessed and collected there on the day of the transaction - without payment, the transfer of title cannot be completed. The total amount depends not on what you actually paid the seller, but largely on the appraised value of the property as determined by the Treasury Department.

There are four principal payments:

• the transfer fee;
• the Special Business Tax with the municipal surcharge (SBT);
• stamp duty;
• withholding tax.

In addition, a separate mortgage registration fee applies if the buyer is taking out a loan.

The Appraised Value, Not the Contract Price

A key point that is often overlooked: the Land Office official calculates taxes based on the so-called Treasury appraisal (appraised value). This is the official valuation, which is revised every four years; the current cycle covers 2023-2026. If the registered transaction price exceeds the appraised value, the higher of the two figures is used for certain payments.

Understating the price in the contract in order to save money is illegal. When the buyer is a legal entity, the Revenue Department may later cross-reference Land Office records with accounting reports and issue additional tax assessments with penalties years down the line. Any savings are therefore illusory.

The Four Payments: Rates and Responsible Parties

The standard (non-promotional) rates are as follows:

The allocation of 'who pays' reflects established practice rather than a mandatory rule. The parties are free to reallocate any item in the sale and purchase agreement; the Land Office requires only that the full amount is paid. In secondary market transactions, the transfer fee is often split equally. In transactions with a developer, the law limits the buyer's share of the transfer fee to one percent.

The Key Rule: SBT and Stamp Duty Are Never Paid at the Same Time

This is a common source of confusion. The Special Business Tax and stamp duty are mutually exclusive. If SBT applies to a transaction, stamp duty is automatically not charged. Conversely, the 0.5% stamp duty arises only when SBT does not apply.

The Five-Year Rule: When SBT Applies

The Special Business Tax (3% plus a 10% municipal surcharge, totalling 3.3%) is charged in two situations:

• the seller is a company (legal entity); or
• the individual seller has owned the property for less than 5 years.

An important caveat for individuals: if a person has owned the property for fewer than five years but was registered as a resident (name entered in the house registration book, tabien baan) and actually lived there for at least 12 months, SBT does not apply - stamp duty of 0.5% is charged instead. As a result, when selling a residence in which the seller has lived for several years, the tax burden is typically lower.

Withholding Tax

This payment is collected by the Land Office on account of the seller's future income tax liability:

• for a corporate seller: 1% of the higher of the contract price or appraised value;
• for an individual seller: calculated on a progressive personal income tax scale, taking into account deductions based on the period of ownership (in practice, this averages roughly 0-3% of the amount).

For the buyer, the withholding tax amount has no direct significance, but it does influence the overall negotiation on the allocation of costs.

Temporary Reduced Rates

Since 2022, the government has periodically introduced incentive measures: a rate of 0.01% on the transfer fee and on mortgage registration for first-home purchases valued up to THB 3 million, and under certain government support programmes. These measures are time-limited and are extended by separate cabinet resolutions, so their current status must be confirmed - in the Royal Gazette or directly at the Land Office.

Leases and 'Sales Through a Company'

Registration of a long-term lease (under the Thai Civil and Commercial Code, the maximum term is 30 years, Section 540 CCC and following) is taxed separately: 1% of the total rent for the entire lease term plus 0.1% stamp duty, both payable at registration.

In some cases, a corporate seller may propose not to transfer the land itself but instead to sell shares in the company that owns the property, in order to avoid Land Office taxes. Bear in mind: the Revenue Department may recharacterise such a structure as tax evasion, and it requires thorough legal due diligence of the company's assets and liabilities.

The Procedure on the Day of the Transaction

The registration itself takes several hours. Payment is accepted by cashier's cheque or in cash - ordinary personal cheques are not accepted. A foreign buyer who cannot be present in person must execute a power of attorney strictly on the Thai-language form prescribed by the Land Department; other forms of power of attorney are not accepted. It should also be noted that for condominiums, a quota applies: no more than 49% of the total floor area of a building may be owned by foreigners (Condominium Act), and funds used for the purchase must be remitted from abroad with a Foreign Exchange Transaction form (Tor.Tor.3, also known as an FET form).

What to Check and What to Watch Out For

• Obtain the Treasury appraised value of the property in advance - taxes are calculated from that figure, not from the contract price.
• Confirm the seller's period of ownership and whether the seller was actually resident and registered there: this determines whether SBT at 3.3% or stamp duty at 0.5% will apply.
• Agree in the contract, in advance, on which party bears each payment - the default practice is not binding.
• Check whether the reduced rate of 0.01% applies to your transaction.
• Do not agree to understate the price in the contract - the risk of additional assessments and penalties remains with you.
• When purchasing through a company or under a long-term lease arrangement, engage an independent lawyer to conduct due diligence.