Cost Breakdown: Purchase Price, Taxes, and Other Fees

Are you dreaming of owning a piece of paradise in Thailand? Well, you're not alone! Thailand's landscapes and culture have been attracting people from around the world. But, it's essential to understand the costs involved. In this blog post, we'll break down the fees when purchasing property in Thailand, especially if you're a foreigner. From the purchase price to taxes and other fees, we'll guide you through the financial aspects of turning your Thai property dream into a reality. So, let's dive in and uncover the secrets to owning your own slice of Thai paradise!

Purchase Price

The term Purchase Price is pretty self-explanatory and, chances are, you may have already heard it in one way or another. In real estate, purchase price refers to the total amount in which a buyer pays for a property. A seller and a buyer would agree on a sum after finalizing negotiations, settling on a particular purchase price.

Taxes

The following is an overview on Thai property taxes, the party responsible, and how it's calculated:

Business Tax: Levied on companies and individual owners who held the property for under five years.

Transfer Fee: Charged by the Land Department and collected upon the ownership transfer date.

Withholding Tax: Varies depending on the ownership (individual or company).

Stamp Duty: Not imposed when the business tax is due.

Thai Leasehold Taxes & Fees

The aforementioned property taxes and transfer fees do not apply to leasehold transactions.

Leasehold Transaction Fee

The leasehold registration fee for property is calculated at 1% along with a 0.1%. This results in a 1.1% applied to the total amount of the lease throughout the duration of its full term. The Land Office will collect the leasehold transaction fee upon registration.

Transfer fee of Leasehold Property in Thailand

The same 1.1% tax applies here. This time, though, only for the value of the remaining term on the lease agreement. To calculate, take the full lease amount and divide by the total amount of years. Then, multiply by the remaining years of the lease term.

As with the lease registration, you must pay the transfer fee upon transfer date at the Land Office. In most cases it's your responsibility to pay the transfer fee as a buyer but you also have the option to share it in equal amounts with the seller.

Renewal fee of Leasehold Property in Thailand

The renewal fee is based on the original lease cost, or an evaluation from the Land Office.

How much is Tax on Rental Income in Thailand

Thai residents are subject to a 5% withholding tax. Meanwhile, foreigners are subject to a 15% withholding tax.

Other Fees

Maintenance Fees

Maintenance fees are for everyday repairs and maintenances on your property. This could range from gardening to tidying up the place for upkeeping. Maintenance fees often range from 40 to 70 baht per square meter. Larger projects with luxurious array of facilities may have higher maintenance fees.

Sinking Fund

Sinking fund is a one-time payment, paid to the juristic person by condo unit owners. This covers maintenance and general upkeeping or repair work on the building. As for how much the sinking fund is, it varies depending on the project and its roster of shared facilities.

Final Verdict

In conclusion, while owning a piece of Thailand's beauty is an exciting prospect, it comes with its fair share of expenses. Remember, understanding these costs is crucial for a smooth and successful process, especially for foreigners. By being well-informed and prepared, you can navigate the journey towards your Thai paradise with confidence and ease. So, whether you're envisioning a beachfront bungalow or a tranquil hillside retreat, now you're equipped with the knowledge to take that next step towards making Thailand your home away from home. Happy property hunting!

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