The two numbers everybody argues about are twenty million and one hundred million
Twenty million baht is the value exempt from income tax when a parent gives immovable property to a legitimate child without consideration. Anything above that is taxed at five per cent.
One hundred million baht is the net value of an inheritance a beneficiary may receive before inheritance tax starts, with ascendants and descendants paying five per cent.
Now look at your actual house.
If the assessed value is under twenty million and the whole estate is under one hundred million, neither number touches you at all.
Which describes most Thai families.
So this is not a tax decision. It is a decision about control.
The question worth asking is whether you are ready to stop being the owner of this house.
What each route actually costs
Settle the money question first, because people assume the gap is large when it is smaller than they think.
Transferring to a child while you are alive is a gift. There is a registration fee of 0.5 per cent of the assessed value, and stamp duty at 0.5 per cent.
Income tax is exempt on value up to twenty million baht in that tax year, with five per cent on the excess.
The trap is in the words legitimate child, which does not include an adopted child.
In a family where the parents never registered their marriage, the child may not be the father's legitimate child in law, even having carried the same surname all their life.
That single fact changes the whole schedule of fees and taxes, and it should be checked before going to the land office rather than at the counter.
Waiting for it to pass as inheritance: the beneficiary registers the transfer by succession, and the registration fee is likewise 0.5 per cent.
Inheritance tax only begins once the net value that beneficiary receives exceeds one hundred million baht.
The deceased's spouse is exempt from inheritance tax.
In pure money terms, for a single house at ordinary prices, the two routes are very close.
The difference is that one is paid today and the other is paid then.
What genuinely changes on the day of transfer
The moment registration completes, the house is not yours.
Not almost not yours, not still partly yours, but not yours.
Most people making this decision understand that in principle without following it through in practice.
Here is what follows in practice.
- Your child can mortgage the house without asking, because they own it.
- Your child's creditors can enforce against it if there are debts and a judgment.
- If your child divorces, the house may be drawn into the division of property, depending on how and when it was acquired.
- If your child dies before you, the house forms part of their estate, and their heirs are their spouse and children, not the parents who gave it.
- Your child can sell it, and you have no power to stop them.
The fourth is the one that hurts Thai families most, and the one almost nobody considers when deciding.
Because everybody plans on the assumption that the parents go first.
The tools that let you give it away without losing your home
Thai law already provides for this, and these tools are in everyday use.
Usufruct. Transfer ownership to the child but register a usufruct in favour of the parents for life.
The parents go on living there, may let it, and may take the fruits, while the name on the deed is already the child's.
What to understand is that a usufruct does not stop the child selling, but the buyer takes the house with the usufruct attached, which means almost nobody buys.
That is where its real protection comes from, as set out in transferring the house to a child with a usufruct.
Right of habitation, lighter than a usufruct: a right to live there without the right to take the fruits, which suits parents who want to stay rather than to earn.
The difference between the two is covered in right of habitation against superficies.
A gift with a charge attached, where conditions are tied to the recipient.
What to know is that section 535 of the Civil and Commercial Code provides that a gift burdened with a charge cannot be revoked for ingratitude.
So this tool trades the certainty of the condition against the loss of the right to revoke.
An arrangement like that should be drafted by a lawyer with the actual documents in front of them, because the wording changes everything.
Revoking a gift for ingratitude is real, but far narrower than people expect
The question parents ask most is whether they can take it back if the child does not look after them.
The answer is yes, in a very narrow set of cases and within a very short time.
Section 531 allows the giver to revoke for ingratitude only where:
- the recipient has committed a serious criminal offence against the giver;
- the recipient has seriously defamed or insulted the giver;
- the recipient has refused the giver the necessaries of life at a time when the giver was in need and the recipient was able to provide them.
Read the third carefully, because it does not say the child stopped visiting, or spoke unkindly, or was ungrateful.
It says the giver was in need, the recipient was able, and the recipient refused.
That bar sits a long way above hurt feelings.
And section 533 sets the clock: once the giver has forgiven, or six months have passed since the person entitled to revoke learned of the cause, revocation is barred, and no action may be brought after ten years from the event.
Six months is very little time in a family matter, where accepting that there is a problem often takes longer than that on its own.
So do not plan on being able to undo it.
The real reasons people transfer while alive
Not everybody who does it regrets it, and several of the reasons are genuinely good.
It settles the inheritance fight while the owner can still speak, rather than after they are gone and everybody claims to remember what was said.
The child can actually use it as security, which matters a great deal to a child starting a business or borrowing for another house.
It is done while capacity is unquestionable, which removes any later argument about whether the giver understood what they were doing.
You get to see it. To watch the child use the house and the grandchildren grow up in it.
The last is not a legal reason, but it is what people actually decide on, and it deserves to be taken seriously.
The real reasons people wait
You can change your mind. A will can be altered up to the last day. A registered gift cannot.
You remain fully the owner, free to sell, mortgage or let without asking anybody.
The house is not exposed to your child's risks, whether debt, marriage or business.
If the child dies first, the property is still yours, and you can choose again.
The last one is what pushes many families this way, once they have heard what happened to somebody else's.
The middle course people actually take
In practice plenty of families do not pick one extreme.
Make a clear will and keep the ownership, which buys certainty without giving up control.
Transfer with a lifetime usufruct registered, which achieves both the succession and the right to stay.
Give some, keep some: transfer the land you do not live on and keep the house you do.
Transfer to one child at a time, as each one's life reaches the right point, rather than everything on one day.
That last has an overlooked advantage: you see how the first child manages property before deciding about the next.
Which family should do which
There is no single answer, but the patterns are clear enough to start from.
A single house the parents still live in: if you transfer, always register a usufruct. Never transfer it bare.
A child in business or carrying debt: hold off, or if you transfer, transfer something other than the house you live in.
Several children with a history of friction: a clearly written will, kept where it will be found, beats transferring to some now and leaving the rest for later.
Elderly parents whose health is becoming uncertain: complete the paperwork now, whichever route you choose, because documents made in good health are far harder to challenge.
An estate over one hundred million: this is beyond the scope of a general article. Plan it with a tax adviser and a lawyer together rather than from something read online.
Four things to do before deciding
One, confirm legitimate child status. The tax and fee rates hang on that phrase, and families where the parents never registered their marriage are often not what they assume.
Two, get the Treasury Department assessed value for the plot, because fees are calculated on the assessed value rather than the market price, and the real figure is usually not the one people guess.
Three, write down where you want to be living in ten years. If the answer is this house, you need an instrument that guarantees it, not merely a child who is kind.
Four, talk to all the children together, not one at a time. What is discussed separately becomes several different versions of the story within five years.
That fourth one prevents more disputes than every document put together.
Frequently asked questions
Is there tax on transferring the house to a child now?
A gift of immovable property to a legitimate child without consideration is exempt from income tax up to twenty million baht in that tax year, with five per cent on the excess, plus the usual registration fee and stamp duty.
Does an adopted child get the same treatment?
No. The exemption applies to a legitimate child, which does not include an adopted child, so confirm the status before going to the land office.
When does inheritance tax start?
Once the net value a particular beneficiary receives exceeds one hundred million baht, with ascendants and descendants paying five per cent. The deceased's spouse is exempt.
Can I still live there after transferring?
Yes, if a usufruct or right of habitation is registered on the day of transfer. Transfer it bare and staying on depends entirely on your child's goodwill.
Can my child mortgage it afterwards?
Yes, because they own it, and their creditors can enforce against it too, which is why transfer should wait where a child is carrying business risk.
If the child does not look after me, can I take it back?
Only on the narrow grounds in section 531, such as a serious criminal offence against the giver, serious defamation, or refusing the necessaries of life while the giver is in need, and proceedings must be brought within six months of learning of the cause.
If my child dies before me, does the house come back?
Not by itself. It forms part of the child's estate, and their heirs are their spouse and children, a risk few people planning this consider.
If I make a will, do I still need to transfer?
No. A will operates on death and can be revised until the last day, an advantage a registered gift does not have.
In short
- Twenty million is the income tax exemption on a gift to a legitimate child, with five per cent above it.
- One hundred million is where inheritance tax begins, which most families never reach.
- For an ordinary single house the two routes cost much the same, one now and one later.
- So the decision is about control, not about tax.
- Once transferred, the child may mortgage, may sell, and their creditors may enforce.
- If the child dies first, the house passes into their estate rather than back to the giver.
- A usufruct is the instrument people actually use to give without losing their home.
- Revocation for ingratitude is narrow and barred six months after the cause is known.
- Talking to all the children together prevents more disputes than any document.