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Taxes involved in buying a condo in Bangkok

Posted by BKK.CONDOS on 23/12/2019

If you are buying a condo in Bangkok, there are certain other payments to consider apart from the purchase price. You may need to contribute to a sinking or capital works fund or pay the balance of the annual management fees, for example.

The most common of such “extras” are the taxes which have to be paid at Land Office when the title (or chanote) of the condo unit is being transferred.

Basically, there are three main taxes to consider and these are levied on the transaction price: Stamp Duty: this is usually 0.5%; Transfer Taxes: usually 2%; Withholding tax, or sometimes called a local tax at between 1-5% (the percentage varies and is calculated by the Land Office).

So, we are typically looking at an amount of around 5.5% or even 6% in some cases of the purchase price to be added in taxes to the costs of a transaction. But this is where it now gets interesting. Many sellers and buyers agree to use the Government Assessed Value as the basis for the taxes. 

This assessment is called Rakha Bramahn in Thai and is the assessment of the condo’s value produced by the Land Office. This figure is usually below the current market value of the condo unit and, therefore, it can be seen as advantageous to both parties to agree to adopt such amount.

Bangkok condominium transfer tax and fees explained

Another point of interest is that the total of such taxes is more often than not shared between the parties to the transaction on a 50/50 basis. These taxes are payable in cash only and each part will need to make sure that they have the right amount of cash with them on the day or transfer of title. However, technically, only the transfer taxes should be shared by the two parties, although sharing such taxes 50/50 is deeply engrained in “market practice” and it may be hard to convince the seller otherwise. 

Sometimes, there may also be a Special Business Tax at 3.3% but this generally only applies where the seller has owned the condo unit for less than 5 years. Two things to note: if this tax is applicable, sometimes the parties share the amount 50/50 but,actually, the liability is with the seller to pay this. 

The second point to note is that if the condo is owned by a Thai Company, this tax is payable irrespective of the duration of ownership. Most foreign owners will not set up a Thai Company to own a condo but there are those who have legitimate businesses in Thailand and, therefore, put any property they own into such a company.

Taxes will be part of any transaction involving buying a condo in Bangkok, and a good real estate agent will explain and make the paying process easy!

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