Property Values & Taxes

Property Values and Tax

When people retire in Thailand they mostly lease property but some do decide after a year or two to buy the condo they live in. This is where confusion might set in when it comes to transfer taxes with regards to property and how they have to be viewed.

When taxes are paid on a property in Thailand there is the commercial value being the value which you are buying it for and then there is the government value much what you would call municipal value in the West.

Certain taxes are based on the market value and some on the municipal value. This is how the value system works in Thailand. Thailand has a Land Office and each district in Thailand has its own land office. They keep track of what the government would view as the value of the property. As stated before certain taxes are based on actual value and other on government or municipal value. These are the taxes payable on a property transfer and which value each one uses. Note that transfer duty is not so much a tax but a government service fee.

  1. Transfer fee – Land Office Valuation
  2. Withholding taxes – Land Office Valuation
  3. Stamp Duty – Market Value
  4. Specific Business Tax – Market Value

So before you buy a property you would want to know what the Land Office valuation is of the property so that you may view what the transaction is going to cost you. This is normally known when a due diligence report is made by an attorney in Thailand. At that point, you will know what the taxes and fees will be for your property. Now the question is how do they determine the value in Thailand compared to your home country. This is what they look at:

  1. Cost of the construction material;
  2. Cost of the labor in Thailand;
  3. Administration costs in the province it was built;
  4. Type and purpose of the building.

This is the bases of the valuation by the government and they calculate it based on the space used. As an example of a government valuation in Phuket 2 years ago, this would be the average value based on size for different types of buildings. This again brings in the issue of the cost of labor and type of or purpose of building.

  1. House – 6,050 THB/sqm
  2. Hotel – 8,150 THB/sqm
  3. Apartment – 5,950 THB/sqm

Now you can see from the above that the type or purpose of the building makes the property a bit more valuable in the eyes of the Land Office. This valuation in Thailand is done every 4 years and they release the stats and values of each type of property for each province. Speak to an attorney in Bangkok about the value of your property and the taxes payable before you invest your retirement egg in it.


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