Financial Benefits
Thailand
has produced outstanding investment returns over the
last twenty years, and this looks set to continue
long into the future. If you are buying purely as an
investment, then a land or housing development project
will produce the best returns. If you wish to purely
buy and hold then land offers the cheapest and most
profitable investment route.
- Developers will often offer
a genuine discount in return for bulk purchase
of units in a development,
particularly if it is early on.
- These discounts
provide you, the investor, with a cushion of profit
in case of any problems. This
additional profit can be substantial - for example if you have
put down a 25% deposit and the discount was a
true 15% off, then the property is worth 17.6% more
than the price you paid - that means you have already
shown
a paper profit of 60% of your deposit.
Tax
There are 2 different types of Tax levied on
a property in Thailand and they are called:
- Land Tax
- Structures Usage Tax
Land Tax is a very small tax levied on land
ownership and is equivalent to just
a few baht per rai
per year. This amount is so small that
the land office
rarely
bothers to collect it and if they do
may wait a few years before the amount is worth
the
effort of collecting.
In any commercial sense, this tax can
be largely discounted.
Structure usage tax is applicable at the
rate of 12.5 % on the actual (or assessed)
gross
rental value
of
the property.
Tax
Expenses Due on the Sale & Transfer
of Immovable Property
The transfer of an immovable property, including the
purchase of land, land with building or a condominium
unit owned by a natural person, including an alien
juristic person is subject to the following costs and
taxes.
Transfer Fee
The transfer fee is usually collected at the
rate of 2 % of the appraised value of property by the
Land
Department. The appraised value may often be much less
than the actual amount paid. This is often split 50:50
between buyer and seller.
Stamp duty
Stamp duty shall be collected at the rate
of 0.5% of the actual purchase price or the appraised
value
of the Land Department, whichever is the higher.
Withholding
Tax
Withholding tax is a tax payable by the seller of an
immovable property to the Land Department immediately
at the occurrence of purchase. The collection of
withholding tax can be divided into 2 cases as follows:
- Withholding Personal Income Tax: The computation
shall be based on the appraised value of the Land
Department.
- Withholding Corporate Income Tax:
The computation shall be based on the appraised
value or the actual
purchase price, whichever is the higher.
The rate used is currently 1%. This does not
apply if the land or property is sold by way
of shares
in a limited company, where ownership has effectively
remained the same.
Specific Business Tax
Specific business tax is collected from the sale
of immovable property for trade or profit purposes
at
the rate of 3.3% of the appraised value or the
actual purchase price, whichever is the higher.
|
