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Transfer/ taxes


Invicta

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When  I look at condo sale adverts I see buyer will pay transfer fee and maybe taxes . Is this a set fee or percentage of the condo price. Who do you pay it to? Interested to hear advice from anyone on PA forum. Thanks

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First of all, who pays is negotiable. Often it is 50/50, but any split is possible.

The amount is based on the value of the property and how long it has been owned--a more recently purchased property will have higher tax/fees. I don't know all the ins and outs, but for a million baht property my guess would be about 50,000 baht or less.

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  • 1 year later...

Great i was looking for somewhere to post this information  as i now have  received 2  Answers and a break down. 

Both similar  and here is  my understanding from magna carta and cut and paste from a recently  received email. 

Firstly you have to understand how the land office values  property to estimate the initial cost as i  was told by Magna Carta.

A property in thailand can't be valued less than its previous sale price.

Eg. if you have negotiate a purchase price of 2 million on a property previously selling  for 3 million the transfer fees % will be calculated  at a minimum value of 3 million or up dependant on what the land office declare the increase value to be. This can increase  on the amount of years since the last sales to include inflation. TIT

@InvictaAs for fees its payed to the land office. 

From my understanding it  all negotiable with in the offer.

1) From magna carta  over skype and the gist i got from my quick chat was that the transfer fee is the sellers responsibility. However  as @expatdude mentions above  it is normally negotiated with in the  sale as a 50/50 split 

2) From a estate agent i been talking to on Baht and sold yesterday.

Thanks for your email. The term "transfer fee" is commonly used as a generalisation for the 4 individual taxes that are calculated, and paid directly to the government land office at the point of property ownership transfer (applicable to Thai or Foreign ownership).
 
Here is a breakdown of the 4 different sections-
 
Transfer tax -                                 2%
Specific business tax -               3.3%
Withholding tax -                          1%
Stamp duty                                0.5%
 
The taxes are calculated at a "progressive rate", to give an accurate approximation we work on 6.8% of the confirmed minimum "declared price" that the land office will allow us to transfer at. There is no "set rule" as to which party pays which part, although generally it is the total amount payable to the land office, which is shared equally between buyer and seller. 
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To add to @talung66 post above, it is a quite common practice to tell the land office that the sale price is below what you actually sell/buy at to keep the taxes lower.

e.g. You sell at 4 million, but you actually declare the sale price as 2.5 million, thereby paying '6.8% transfer tax' on 2.5 mill rather than 4 mill.

Obviously if you go too low the Land Office will reject it, which is what the following sentence from the last paragraph in the post above is saying in another way:

"we work on 6.8% of the confirmed minimum "declared price" that the land office will allow us to transfer at." 

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40 minutes ago, shagwell said:

To add to @talung66 post above, it is a quite common practice to tell the land office that the sale price is below what you actually sell/buy at to keep the taxes lower.

e.g. You sell at 4 million, but you actually declare the sale price as 2.5 million, thereby paying '6.8% transfer tax' on 2.5 mill rather than 4 mill.

Obviously if you go too low the Land Office will reject it, which is what the following sentence from the last paragraph in the post above is saying in another way:

"we work on 6.8% of the confirmed minimum "declared price" that the land office will allow us to transfer at." 

 

1 hour ago, talung66 said:

A property in thailand can't be valued less than its previous sale price.

EDIT 

I did fully read your reply on the land office rejecting price  ( was about to  edit mine reply  but i leave it)

As you have no choice but to be at least same  as the previous sale price ( it is on record)

 

Thanks shagwell 

That all sound plausible  

However as i mentioned the selling  price your telling the land office can not  be lower than the previous selling  price.

Even if you do  purchase at a lower  value.

The land office will increase the price.

This happened to a someone i knew that  bought at VT6  from recollection  purchase was around 6  million the previous owner bought it for 7 million. the land office did not accept that and valued it higher than 7 million.  

Edited by talung66
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THE THING ABOUT COMMON SENSE IS THAT IT'S THAT NOT COMMON                                                                        

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2 hours ago, talung66 said:

 

EDIT 

I did fully read your reply on the land office rejecting price  ( was about to  edit mine reply  but i leave it)

As you have no choice but to be at least same  as the previous sale price ( it is on record)

 

Thanks shagwell 

That all sound plausible  

However as i mentioned the selling  price your telling the land office can not  be lower than the previous selling  price.

Even if you do  purchase at a lower  value.

The land office will increase the price.

This happened to a someone i knew that  bought at VT6  from recollection  purchase was around 6  million the previous owner bought it for 7 million. the land office did not accept that and valued it higher than 7 million.  

Fully agree, I think we are saying the same thing, though your earlier post gives more detail about how the tax is broken down.

For instance I bought my current condo for 3.4 million but the purchase price was registered as 2 million with the land office. If I was to sell now at say 4 million (unlikely in the current climate!) I could have the sale registered as below 4 million but it would have to be higher than 2 million that the previous sale was registered at - and take into account the increase in value over time as dictated by the land office. 

Useful to have a good accountant involved to ensure you pay the bear minimum you can 'get away with'.

Note if buying/selling a condo in Thai company name rather than foreign name the transfer costs can be vastly reduced, as you buy/sell the company rather than the condo, which remains in ownership of the same company (just the controlling director changes). However you are then liable for annual company accounting fees instead.

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54 minutes ago, shagwell said:

Fully agree, I think we are saying the same thing, though your earlier post gives more detail about how the tax is broken down.

For instance I bought my current condo for 3.4 million but the purchase price was registered as 2 million with the land office. If I was to sell now at say 4 million (unlikely in the current climate!) I could have the sale registered as below 4 million but it would have to be higher than 2 million that the previous sale was registered at - and take into account the increase in value over time as dictated by the land office. 

Useful to have a good accountant involved to ensure you pay the bear minimum you can 'get away with'.

Note if buying/selling a condo in Thai company name rather than foreign name the transfer costs can be vastly reduced, as you buy/sell the company rather than the condo, which remains in ownership of the same company (just the controlling director changes). However you are then liable for annual company accounting fees instead.

100%

While we're talking other costs  and information  now

I also have some  other info sent to me that will be use full to readers.

A reply from magna carta from the questions i sent via their web page with  costs.

Any condo purchase should start with diligence first which means we check the legalities of the purchase to make sure all is above board and legal to proceed. This includes checking the seller has the legal right to sell, making sure there are no leans or obligations again the title deed and also checking the local court to see if there are any court cases against the property. This takes around 7 working days and cost 10,000 baht. 

If all is good then we can move forward to by the condo. 

Being out of the country just slow things down that all. We can prepare various papers for you to sign with the notary public lawyer needed for us to represent you at the land office. 

Is the unit being sold under the foreign quota or Thai quota? If foreign quota that means it can transfer into your name as long as you send the funds for the purchase into Thailand in foreign currency. In this case it would be sent to our law office trust account from your personal bank      account overseas in foreign currency. We would then get the required paperwork from our bank to show the land office these funds were yours and also transferred in foreign currency. 

If you are buying in the Thai quota then if you want to make sure the unit is under your control then you should open up a Thai limited company for the condo to be transferred into. As a foreigner you can be the director and also hold 49% of shares. The other 51% shares have to be held by a minimum of 2 Thai nationals. We can prepare the papers to show these are being held for you on their behalf. 

The costs involved are as follows. I will split into foreign purchase and Thai purchase. 

Foreign purchase

Diligence 10,000 THB

Receive funds into our client account and represent at the land office for transfer 25,000THB

Total 35,000 THB

 

Thai purchase

Diligence 10,000 THB

Receive finds into our client account and transfer at the land office 20,000 THB

Set up Thai company for transfer 35,000 THB

 

Total 65,000 THB.

General reply from estate agent 

1)comment from estate agent 

A major advantage of purchasing under company name is that you don't have to pay any of the transfer fees applicable at the land office, for a property like that at Regents this would be approx 270,000 THB (if in Thai or foreign name), whereas to change the directorship from seller to buyer is 15,000 THB with an annual "balance sheet" fee of 12,000 THB. There are also no restrictions as to how you bring the funds into Thailand when making a purchase under company name, whereas if in personal name you must transfer as foreign currency from a traditional bank account, held in your name and registered outside of Thailand. When purchasing foreign quota apartments you cannot use services such as Ozforex, Wise etc, which generally offer much better exchange rates than the banks. 

2) Using services such as Wise or Ozforex are fine if purchasing under Thai or company name. However if you purchase under foreign ownership the Thai bank will not issue the TT3 (foregn exchange document) unless the money has been transferred to Thailand from a bank account held in the buyer's personal name, outside of Thailand.

 

NB 

I disagree with the comments of  sending money to myself via WISE (Transferwise) as my BKK bank statement shows the transaction as an  international transfer the same as it shows for me sending to myself AUS bank to BKK bank 

Attached  are 2 cash  deposits in my BKK bank account

one i sent via my AUS bank to my BKK bank

The other i sent from my AUS  bank via  TransferWise account to my BKK account 

image.png.a88380905e4e7c517ce7fa143b79aca8.png

 

 

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Yeah, I'd be interested to see if a wise transfer could be used to get a TT3 foreign exchange document or not. Since @Talung says the funds are registered as foreign transfers, I would think you would be able to get a TT3.

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19 minutes ago, expatdude said:

Yeah, I'd be interested to see if a wise transfer could be used to get a TT3 foreign exchange document or not. Since @Talung says the funds are registered as foreign transfers, I would think you would be able to get a TT3.

If that doesn't work you can always get the tt-3 from TT Exchange they arranged to mine so I didn't have to bring money from out of the country made life easy took 1 hour

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3 hours ago, expatdude said:

Yeah, I'd be interested to see if a wise transfer could be used to get a TT3 foreign exchange document or not. Since @Talung says the funds are registered as foreign transfers, I would think you would be able to get a TT3.

FYI you misses the 66 i didn't get notification.

Anyhow 

It will be a while yet before i need to purchase i am only sending in lots of 10k AUD on average .

I am hoping so but company title is an option so i not particularly fussed ATM

I rang transferwise about  my first transfer and said my money  need to arrive as a foreign transfer. The reply given to me was to use the purchase a condo drop down box and it should.  And if it doesn't i can ask for  a document to prove it was.  I think the name of it was a foreign transfer exchange (FTE) can someone enlighten me on the real name.

Any how  i am keeping all my records as screen shots. As from reading  the hot resale grand avenue thread a buyer had issues with money transfers he did a while before purchase . TIT banks records only go back 6 months in your  online account and there are  extra cost  involved to retrieve them as hard copies.

3 hours ago, Soi7 said:

If that doesn't work you can always get the tt-3 from TT Exchange they arranged to mine so I didn't have to bring money from out of the country made life easy took 1 hour

Can you simplify this not sure exactly what you mean 

+ when i arrive every time  i exchange AUD cash. for baht .   I bring around  10K in AUD with me and change it at TT then deposit the baht into my Thal bank account.

Can i ask TT for the tt3 in this exchange ??? 

Edited by talung66

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THE THING ABOUT COMMON SENSE IS THAT IT'S THAT NOT COMMON                                                                        

 IT'S NOT ROCKET SURGERY       quote from Anna Nicole Smith.

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7 hours ago, talung66 said:

Can you simplify this not sure exactly what you mean 

+ when i arrive every time  i exchange AUD cash. for baht .   I bring around  10K in AUD with me and change it at TT then deposit the baht into my Thal bank account.

Can i ask TT for the tt3 in this exchange ??? 

In my situation since I worked here in Thailand I made enough money to buy the condo with money I made here in Thailand. Despite that and I having a work permit and paying taxes here in Thailand the money still had to come from outside of Thailand to buy the condo so I had to send it to the US and have them send it back to me well I wasn't going to do that. It seemed to me to be stupid as I earn the money legally here why can't I use it to buy the condo.

So I told the lady that was handling the sale of the condo that I was no longer interested because of this she said for a cost of 5k TT exchange at their main office on second Road could get me the TT3 certificate that the land office required. So we went down and I had them do it took about an hour. So by doing this it's saved me from sending the money I earned here out and then having it come back again and getting it beat up on exchange rates on both ends a pretty stupid rule in my book but again it's their country their rules

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4 minutes ago, Soi7 said:

In my situation since I worked here in Thailand I made enough money to buy the condo with money I made here in Thailand. Despite that and I having a work permit and paying taxes here in Thailand the money still had to come from outside of Thailand to buy the condo so I had to send it to the US and have them send it back to me well I wasn't going to do that. It seemed to me to be stupid as I earn the money legally here why can't I use it to buy the condo.

So I told the lady that was handling the sale of the condo that I was no longer interested because of this she said for a cost of 5k TT exchange at their main office on second Road could get me the TT3 certificate that the land office required. So we went down and I had them do it took about an hour. So by doing this it's saved me from sending the money I earned here out and then having it come back again and getting it beat up on exchange rates on both ends a pretty stupid rule in my book but again it's their country their RULES

Thanks that's great to know  a great saving on  tea money a zero less from land office transactions i heard about.

Ask a silly question and i'll leave a silly answer  

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THE THING ABOUT COMMON SENSE IS THAT IT'S THAT NOT COMMON                                                                        

 IT'S NOT ROCKET SURGERY       quote from Anna Nicole Smith.

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  • 2 months later...

All great advice here, thanks! 

1) In regards to Special Business Tax (SBT) - is that one always taken or is it only if it's sold within 5 years of ownership? This text got me somewhat confused: 

https://www.samuiforsale.com/real-estate/condominium-transfer-tax-and-fees.html

2) On the "suggestion" (or possibility) of telling the Land Office that the selling price was lower than you and the seller agreed upon, isn't that checked and verified by the Land Office? I mean, surely they use your contract as a basis for registering the price, no? 

 

Edited by Jackie2013
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On 07/12/2021 at 04:54, Jackie2013 said:

2) On the "suggestion" (or possibility) of telling the Land Office that the selling price was lower than you and the seller agreed upon, isn't that checked and verified by the Land Office? I mean, surely they use your contract as a basis for registering the price, no? 

 

I dont know for sure but not from my understanding.

Any how i was looking at a place and the  asking price is 2 mill the seller states  2.7 mill as the developer price when purchased .

Therefor the  transfer fees will have to be registered at least  2.7 mill or higher.

My plan is  to negotiating a purchase price. with a agreement  to a 50/50 transfer on the 2mill asking price only the extra will be the sellers issue. 

IMO it shouldn't  be the buyers issue having the land office increasing the selling price with TIT issues.

Ask a silly question and i'll leave a silly answer  

Would have been easier if you googled it yourself.    

Thanks spelling and grammar checkers for being a ?%6433%#E

Quote if you expect a reply.  

THE THING ABOUT COMMON SENSE IS THAT IT'S THAT NOT COMMON                                                                        

 IT'S NOT ROCKET SURGERY       quote from Anna Nicole Smith.

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