Property Transfer Taxes
When anyone buys or sells immovable property in Thailand, several taxes must be paid. Keep the cost of taxes in mind when you are looking for a condo. The Land Department collects these taxes when the deed is transferred. When you buy secondhand, the buyer usually pays all of the taxes! This happens because it lowers the purchase price and thus the total taxes due. When buying a condo directly from the developer, the developer usually pays the Special Business Tax (SBT) and splits the rest of the taxes with the buyer 50/50.
The Special Business Tax (SBT) is a 3.3% tax on the sales price. The tax is only applicable if the seller has owned the property for less than 5 years. If you buy a unit in a new development, the SBT will apply, but the sales contract will usually specify that the developer pay it. If the seller has owned the property for 5 years or more, a 0.5% Stamp Duty is owned instead of the SBT.
The second applicable tax is the Transfer Duty, which is 2% of the assessed value. The Land Department assesses a property's value, and the assessment is usually lower than the sales price. The final tax is the Withholding Tax. The Withholding Tax is a prepayment of the seller's income taxes.
If you buy a condo from a developer or a company, the Withholding Tax will be 1% of the assessed value or sales price (whichever is higher). If you buy a secondhand condo from an individual, the Withholding Tax will be higher. When an individual sells a property, the Land Department calculates the amount of Withholding Tax based on the assessed value, and the duration of the sellers ownership. Although the tax is payment for the seller's income tax liability, the buyer usually pays.