The Thai government's tax stimulus package for the property sector is due to expire on 28 March 2010. Property transfers after this date will attract higher transfer and registration fees.
- Special Business Tax
SBT to increase from 0.11% to 3.3%
Special business tax ("SBT") is payable by individuals on the sale of property within five years of the date of initial acquisition and by corporate entities irrespective of the period of ownership.
Presently SBT is imposed on the sale price of immovable property at a reduced rate of 0.11%, however, SBT at the rate of 3.3 % will apply to sales registered after 28 March 2010.
Application of reduced rate
The reduced rate applies to real property transactions falling under the definition of "sale" under the SBT chapter of the Thai Revenue Code, including agreements to sell, sales with rights of redemption, exchange, gift, letting out on hire-purchase, and disposals or transfers whether or not for consideration.
The reduced rate presently applies to any type of immovable assets, including a condominium and/or condominium unit(s).
- Transfer registration fees
Transfer registration fees to increase from 0.01% to 2%
Presently, reduced registration fees of 0.01% apply to the registration of mortgages of immovable property transfers, however transfers registered after 28 March 2010 will be subject to transfer fees of 2%.
Application of reduced rate
The reduced transfer registration fee applies to sales (including sales in accordance with a Court ruling) and auctions by the Legal Execution Department. The reduced rate does not apply to the registration of sales with a right of redemption, transfer of immovable property for the purpose of repayment of debt or debt arising from a mortgage.
The reduced transfer rate applies to
- Land, buildings or land with houses, shophouses, or commercial buildings under the Land Allocation Act or land allocated by Government or governmental organizations which have authority and duty to allocate land.
- Other houses, shophouses or commercial buildings individually or together with land of an area not exceeding 1,600 square metres.
- Condominium units and entire condominium buildings.
- Office buildings for which a construction permit or a receipt acknowledging construction has been obtained.
- Mortgage registration fees
Mortgage registration fees to increase from 0.01% to 1%
Presently, reduced transfer fees of 0.01% apply to the registration of mortgages of immovable property. Mortgage registration fees will be increased to 1% after 28 March 2010.
Eligible immovable properties
The reduced mortgage rate applies to the same types of properties that are eligible for reduced transfer registration rates (see heading 2 above) with one exception – no reduction in mortgage registration fee applies for office buildings.