Reported value and transfer fees

Last edited: September 02, 2017 at 16:10:23

There is often confusion about the reported value of a condominium and the total amount of fees, taxes, and stamp duties that buyer and seller need to pay to complete the transfer. The percentages set by the government are often changing, they depend on a number of factors and there are perhaps no official English terms for the several components of the money to be paid at the Land Registry Office, leading to some confusion.

Here, we simply refer to "the aggregate of fees" to denote the total sum of all the components that need to be paid upon transfer.
The basis for calculating the aggregate of fees depends on:

the government value of the property
the reported value
the time in between the current transfer and the last transfer

The government value of the property is set by the government every year or few years, and depends on each building and each floor. So all units on the 10th floor of a certain building have the same government value per square meter.
Now you will be taxed based on the difference between the reported value and the government value.
For example, if the government value is 1 million baht and you report 1.5 million baht, you'll be taxed over 500,000 baht.

The calculation of the aggregate of fees is split into 4 categories (non-official terms):
1. personal tax 2%
2. business tax 3.3%
3. other transfer fees about 0.5%
4. stamp duties

Business tax needs to be paid if the property is transferred within a period of 5 years. All of this is irrespective of you being a foreigner or a Thai.
Roughly calculated, the total is about 5.8% (in case the property is transferred within 5 years) and about 2.5% (in case the property was last transferred longer than 5 years ago).

How big a share of this you have to pay as a buyer depends on what you have negotiated with the seller. Often, buyer and seller agree on a 50%-50% split, perhaps out of ease or fearing high fees, but you can of course negotiate otherwise.
Note that all of this money has to be paid in cash.

Officially, one has to report the real value of the purchase, but a lot of people don't to save taxes.

In the above example and assuming the property was transferred less than 5 years ago, if you would report just 1.1 million baht instead of 1.5 million baht, you would together save about 5.8% x 400,000 = 23,200 baht on taxes. You can get yourself some nice piece of furniture for that.

The main requirement for reporting value at the land office is that it should be higher than the government value, and preferably also higher than the value it was previously (reportedly) sold for.

It is therefore better, in any case, to prepare yourself well about the reported value to avoid problems at the land office. Ask us for assistance.