About taxes
The best thing about investing in Thailand isn’t its beaches, although they are beautiful. It isn’t the people, although you’ll love them.
It just might be the taxes.
Thailand is a dream country for anyone looking to invest in property since the real estate taxes are very lenient.
But as someone new to Thai, and Phuket real estate, it can become confusing as to what taxes to pay when you buy property.
Let go explore what they are, shall we?
- Transfer tax
- Withholding tax
- Stamp duty
- Business tax
Transfer tax-
As your property is being transferred to you, you will get 3 ownership options-
- Foreign Freehold
- Leasehold
- Thai Company
If the property you bought is a condo, then all 3 options can be chosen with a tax rate of 2%. Paying this tax amount is not a clear cut process. If youre buying a property under construction or off-plan, then the developer needs to share the tax with the buyer. But if the property comes from the secondary market, then the question of who must pay the tax can be agreed upon at the point of sale. The actual tax amount itself depends on the appraised value of the land as indicated by the land department.
Withholding tax
Withholding tax is pretty much Income Tax and its paid by the seller. Its the tax you pay once the property is sold. For a Thai company, the tax is 1% of the appraised value or the sale value, whichever is higher. The duration of ownership also plays a role- the longer you’ve owned it, the lesser the tax you need to pay. For individuals, the tax is set progressively and will increase based on how much you made on the sale.
Business tax
Business tax is paid by the seller, be it a company or an individual. Business tax is charged at 3.3%, but you are exempt from it if you’ve owned the property for atleast 5 years or if you’ve inherited it.
Stamp duty
You only pay stamp duty if you don’t have business tax to pay. The stamp duty rate is only 0.5%.
Conclusion
Clearly, Phuket, as a part of Thailand has very low taxes compared to other real estate havens around the world. If you are interested in buying a Phuket property, hop onto Ibgproperty.com to experience an end-to-end solution for all your real estate investment needs.
