Business Tax Fee Raised On Land Transfer Fees

The Thai Parliament recently delayed four of the five Land office transfer fee increases set to become effective after March 26, however the largest fee of the five did go up.

The Business Tax charge is the largest fee and accounts for about 90% of the total of the fees charged on valuations of property being bought and sold.

However it is inexpensive to record a lien against a property to protect foreign investors. Also it is inexpensive to record leases to protect foreigners. The mortgage fees will rise on May 31giving people ample opportunity to record a mortgage against their property for asset protection before the mortgage fees go up

Head of the Chonburi Land Office Thavan Thimasrn who is the head of all the Land Offices in  Chonburi which includes Pattaya told the Pattaya Times“The Land Office has been conducting investigations on land sales with foreigners to make sure the people in the company are actually working at the company. We have had people who got their maids to sign papers for them and we are strictly enforcing against that. We are not strict about  having or not having a work permit issued when selling, what we are more concerned about is percentage ownership is at least 51% Thai owned.” 

He added the fees for land transfers, lease agreements and mortgage loans are the same for both individually owned and for those owned in a company. These properties must be divided correctly and have the official land office stamp on the back of the title deed. As for resales of  homes or condos, the reduced fees only apply to houses where the owner has been registered under the residential booklet for at least one year. 

The extension of the reduced period only applies to leases and mortgages and not on business tax. The reduction of the business tax ended on March 26. With the reduction no longer in effect for the business tax, when a company sells property they pay a business tax of 3.3% along with four other fees.

As an example on a 1 million baht property you would have paid 11,715 baht in total before March 26. You can pay 43,615 baht now or you will pay 56, 615 baht after May 31.

Business tax is not payable if the person has owned the company for five or more years.

Head of the Registration Department of the Chonburi Land Office Wuthi Wongsuthi said, “Ever since the reduced fee period, the volume of property transferred has doubled. Normally we would have customers until around 1pm but now we have customers all day until we close. The properties transferred are mostly condos owned by individuals and the majority of them are Thais.”

Mr. Somchai, from the Banglamung Land Office said, “Due to the extension of the reduced fees period, the Banglamung Land Office will also be open on Saturday May 29 and Sunday May 30. This will end at exactly 2pm on May 31. After 2pm on May 31 the fees for land transfer, lease agreements and mortgage loans will be at 2%.”

During the reduced fee period, only the lease agreement and mortgage loan fee are reduced from 2% to 1% while the duty stamp is still 1.5 baht per 100,000 baht of the land office valuation.