Selling a condo in Thailand involves several financial considerations that can significantly affect the final amount you receive. From transfer fees to taxes and agent commissions, understanding these expenses is crucial for any seller. This guide will walk you through the detailed steps and calculations needed to forecast your net proceeds from the sale.

1. Calculating the Transfer Fee

When you sell a property in Thailand, a transfer fee of 2% of the appraised value of the property is typically applied. This fee is usually split equally between the buyer and the seller

Example Calculation:

For an appraised value of 13,307,762 THB:

• Transfer Fee: 2% × 13,307,762 THB = 266,155.24 THB
• Seller’s Share: 266,155.24 THB / 2 = 133,077.62 THB

2. Determining Tax Obligations: Business Tax or Stamp Duty

The type of tax you will need to pay—either business tax or stamp duty—depends on how long you have owned the property and its registration status.

• Business Tax: Applies if the property has been owned for less than 5 years. It is calculated at 3.3% of the selling price.
• Stamp Duty: Applies if the property has been owned for more than 5 years or has been registered in the Blue Book for more than one year. It is calculated at 0.5% of the selling price.

Example Calculation:

For a selling price of 21,500,000 THB:

• Stamp Duty: 0.5% × 21,500,000 THB = 107,500 THB

3. Withholding Tax Calculation

Withholding tax is calculated based on the appraised value and the duration of ownership.

Steps:

Taxable Income: 50% of the appraised value is deductible as expenses.

• Taxable Income: 13,307,762 THB - (50% × 13,307,762 THB) = 6,653,881 THB

Average Annual Income: Divide the taxable income by the number of years of ownership.

• For 6 years of ownership: 6,653,881 THB / 6 = 1,108,980 THB

Apply Progressive Income Tax Rates: The tax rates are progressive, ranging from 0% for incomes up to 150,000 THB to 35% for incomes over 5,000,000 THB.

4. Real Estate Commission Fee

If a real estate agent is involved, the commission is typically 3% of the selling price, plus VAT.

Example Calculation:

For a selling price of 21,500,000 THB:

• Commission Fee: 3% × 21,500,000 THB + VAT = 690,150 THB

5. Total Seller’s Expenses

To determine the total expenses incurred by the seller, add all the applicable costs.

Example Calculation:

Seller’s Expenses: Transfer Fee+ Business Tax or Stamp Duty+ Withholding tax+ Real Estate Commission Fee

• Seller’s Expenses= 133,077.62 + 107,500 + 710,776.20 (example withholding tax) + 690,150 = 1,641,503.82 THB

6. Net Proceeds to Seller

Finally, subtract the total expenses from the selling price to find out what the seller will net from the sale.

Example Calculation:

Net to Seller: Selling Price- Seller’s Expenses

• Net to Seller = 21,500,000 THB - 1,641,503.82 THB = 19,858,496.18 THB

 Final Buyer Costs

In addition to the selling price, the buyer typically pays 1% of the transfer fee. To calculate the final cost for the buyer, add this amount to the selling price.

Example Calculation (Final Price for Buyer):

• Final Price = Selling Price + 1% of Transfer Fee
• 21,500,000 THB + (1% × 13,307,762 THB) = 21,766,155.24 THB

Conclusion

This guide provides a clear overview of the costs involved in selling a condo in Thailand, helping sellers to understand the financial aspects of the transaction. By preparing for these expenses, sellers can make informed decisions and plan effectively for their next steps post-sale