When purchasing property in Thailand, especially in Koh Samui, it’s essential to be aware of the various property taxes and fees.

A Guide for Koh Samui Property Buyers

Without proper guidance, you might face unexpected costs after your purchase. There are four key taxes and fees that may apply when buying or selling property in Thailand, depending on the transaction details, the seller, and the duration of ownership. Most of these fees are based on the government's ``tax assessment value`` of the property, which is usually lower than the market value.

Key Taxes and Fees in Thailand

Transfer Fee

  • Rate: 2% of the appraised value.
  • Applicable For: Sale of freehold land & property, transfer of leasehold land.
  • Responsibility: Typically shared equally between the buyer and seller, though this can be negotiated.

Lease Registration Fee

  • Rate: 1% of the total rent payable over the lease term.
  • Applicable For: Transfer of leasehold land.
  • Responsibility: Usually shared between the lessor and lessee, but must be agreed upon by both parties.

Specific Business Tax (SBT)

  • Rate: 3.3% of the official appraised value or the contracted price, whichever is higher.
  • Applicable For: Sale of freehold land & property, transfer of leasehold land.
  • Responsibility: Paid by sellers who have owned the property for less than five years.
  • Exemptions: Individuals who have used the property as their principal residence for at least one year and are listed in the household registration certificate.

Stamp Duty

  • Rate: 0.5% of the appraised value or contracted price, whichever is higher.
  • Applicable For: Sale of freehold land & property, transfer of leasehold land.
  • Responsibility: Paid by the seller when SBT is not applicable.

Withholding Tax (WHT)

  • Rate: 1% of the official appraised value or the contracted price for companies; for individuals, the WHT is based on the individual’s marginal tax rate (5-37%) with specific deductions.
  • Applicable For: Sale of freehold land & property, transfer of leasehold land.
  • Responsibility: Paid by the seller.
After purchasing a property, there are two types of annual taxes that property owners should be aware of:

Ongoing Property Taxes in Thailand

Land Tax

  • Description: A minimal annual tax for land ownership, often just a few Baht per rai for private residences. However, it can be higher for properties held by companies.
  • Payment: The property owner must pay this tax at the local tessaban or government office. While there is no bill sent, unpaid taxes can prevent future property transfers.

Structures Usage Tax

  • Rate: 12.5% of the actual or assessed gross rental value of the property.
  • Applicable For: Properties used for commercial purposes or rental properties.
  • Description: This tax is based on a notional value, which is typically lower than the commercial market rental value.

Important Considerations

Corporate vs. Personal Ownership: If purchasing property through a company, remember that corporate tax rates are higher than personal tax rates. The cost of setting up and maintaining a company should be factored into the investment.

Foreign Currency Transfers: When buying property in Thailand, ensure that funds are transferred in foreign currency and converted to Thai Baht locally. For transactions exceeding USD 20,000, the receiving bank will issue a Foreign Exchange Transaction Form, which may be needed for future repatriation of funds without tax penalties.

Repatriation of Funds: Investment funds and loan repayments can be remitted freely with proper documentation, such as the Foreign Exchange Transaction Form or loan contract. Failure to provide proper documentation may result in funds being taxed as income.