What are transfer fees in Thailand property purchase and who pays them?

Like any property market, purchasing property in Thailand will incur additional expenses and fees. Before buying a property, you might come across transfer fees, business tax, and stamp duty during your research, but what are they? And who’s responsible for paying them? Here’s what you need to know.

Transfer Fee

The Thailand Land Department charges 2% over the appraised value of the property.

Business Tax

This is assessed at 3.3% of the appraised value. However, it’s only payable if the property is sold within the first five years of ownership. If not, stamp duty will be imposed in its place.

Stamp Duty

A total of 0.5% over the registered value will be taxed. If specific business tax is applicable, stamp duty is not necessary.

Withholding Tax

This depends on whether the seller is a company or an individual. Company withholding tax is fixed at 1% of the appraised value or 1% of the sales price, whichever is higher. On the other hand, if the property seller is an individual, the withholding tax is calculated at progressive rates based on the appraised value.

Who pays the transfer fees and taxes?

Developers usually split all fees 50/50 with buyers. However, in private transactions, the seller often bears the majority of the costs which include business tax, stamp duty, and withholding tax. Buyers on the other hand are expected to pay 1% of the 2% transfer charge in general. However, this is very much a case-by-case outcome and is subject to negotiation. It is usually agreed upon in advance how much of these taxes and fees the sellers or the buyers will be responsible for paying. It’s also a good idea to talk to an agent or property lawyer beforehand.

Keep in mind that the fees are different for registering a lease and buying a property from a developer.