Transfer day has four charges, and the first three start from the assessed value, not the agreed price
The first is the transfer registration fee, ordinarily 2 per cent of the assessed value.
The second is either specific business tax at a combined 3.3 per cent or stamp duty at 0.5 per cent. One or the other, never both.
The third is withholding tax on the seller's income, which is the most involved calculation of the four.
The fourth is the mortgage registration fee, 1 per cent of the mortgage amount capped at two hundred thousand baht, which only arises where the buyer is borrowing.
The words to underline are assessed value.
Because most people take the agreed sale price, multiply it by the percentages, and arrive at a figure that matches nothing they actually pay.
The assessed value is the government's own figure. It is usually below market, and it can be obtained in advance.
Charge one: the transfer registration fee
The ordinary rate is 2 per cent of the assessed value.
Some transfers attract less, such as between parents and legitimate children, and transfers by inheritance to heirs, which are at 0.5 per cent.
Something else to check before going to the land office is that governments periodically introduce temporary reductions to the transfer and mortgage registration fees for residential property below a stated price ceiling.
Those measures have a start date and an end date, and conditions on property type and price.
So the question to ask is which measure is in force on the actual day of transfer, not the one you read about last year.
The gap between 2 per cent and a special reduced rate runs to tens of thousands of baht on an ordinary house, which is enough to move a transfer date by a fortnight to catch it.
Charge two: specific business tax or stamp duty, never both
These two are alternatives. Where specific business tax applies, stamp duty does not.
Specific business tax at a combined 3.3 per cent, calculated on the assessed value or the sale price, whichever is higher.
It is triggered by selling within five years of the date of acquisition.
But there is an exemption that matters enormously for a house somebody actually lives in: where the seller's name has been on that house registration for more than one year, it does not apply, even within the five years.
That exemption is why so many sellers check the house registration before fixing a transfer date.
Because the difference between 3.3 per cent and 0.5 per cent on a three million baht house is nearly eighty thousand baht.
Other common exemptions include property acquired by inheritance, property taken by expropriation, and a transfer to a legitimate child without consideration.
Stamp duty at 0.5 per cent, calculated on the assessed value or the sale price, whichever is higher, and paid where specific business tax does not apply.
Charge three: withholding tax, the hardest of the four to work out
This is what people miscalculate most, because it is not one percentage applied straight through.
For an individual seller the calculation runs in this order.
Step one, start from the assessed value, not the agreed sale price.
Step two, take the standard deduction for the number of years held, at the rates set by Royal Decree.
- Held 1 year: deduct 92 per cent
- 2 years: 84 per cent
- 3 years: 77 per cent
- 4 years: 71 per cent
- 5 years: 65 per cent
- 6 years: 60 per cent
- 7 years: 55 per cent
- 8 years or more: 50 per cent
Step three, divide by the number of years held to get an annual figure.
Step four, calculate tax on that annual figure at the income tax rates.
Step five, multiply back by the number of years held. The result is the amount withheld on transfer day.
One thing to know: where the holding exceeds ten years, only ten are counted.
And years are counted by calendar year rather than by anniversary, which means property acquired in late December and sold in early January counts as two years held.
That detail genuinely changes the number, and it is why moving a transfer date across the new year sometimes helps.
For anybody who would rather not do the arithmetic, the Revenue Department publishes a withholding tax calculator for property sales on its own website, which gives the figure from the source rather than from an article.
For a corporate seller the method differs: 1 per cent of the assessed value or the sale price, whichever is higher.
Charge four: the mortgage registration fee
Where the buyer is borrowing, the mortgage is registered on the same day, immediately after the transfer of ownership.
The rate is 1 per cent of the mortgage amount, capped at two hundred thousand baht.
The figure used is the mortgage amount, not the price of the house and not the assessed value.
So somebody borrowing well below the purchase price pays less here than they expected.
Government fee reduction measures usually cover this one too, so ask about both at once.
The small charges nobody mentions, for which you need cash
The four charges above are nearly all of it, but a few small items are paid at the counter.
- Application and miscellaneous fees, which run to tens of baht
- Duty and fees on a power of attorney, if you are not attending in person
- Photocopying and certification of copies, small but paid in cash
None of it is large, but it is why you take cash with you rather than arriving with a cashier's cheque and nothing else.
Who pays what is negotiated, not fixed by law
This causes more arguments at the counter than anything else.
Market custom splits the transfer fee equally, puts the withholding tax and specific business tax on the seller, and the mortgage registration fee on the buyer.
But custom is not law, and the parties can agree anything else.
What to do is write it into the sale and purchase agreement item by item, naming each charge, rather than writing that transfer day costs are shared equally.
Because transfer day costs does not mean the same thing to everybody, and on the day there is no time to argue about it.
This sits in the same set as the preparation covered in selling your house without an agent.
Three things that throw the calculation off
A new round of assessed values. Assessed values are revised in cycles, and a transfer date straddling a new cycle changes a figure worked out in advance.
The protection is to get the assessed value for that plot from the land office shortly before the day, rather than using a number remembered from last year.
Multiple owners. Where land is co-owned, the withholding tax is calculated on each owner's share, which totals differently from calculating it as one lump.
Co-ownership and its effects are covered in two houses on one title deed.
A sale price well above the assessed value. Specific business tax and stamp duty take the higher of the two figures, while the transfer fee and withholding tax use the assessed value.
So in a deal priced far above assessment, those two charges are larger than expected.
What to do before transfer day
Get the assessed value for that plot from the land office holding the deed, because everything starts from that number.
Check how long the seller has been on the house registration, because more or less than one year changes the whole of charge two.
Count the holding years by calendar year, and see whether moving the date across the new year changes the figure.
Ask the bank what mortgage amount will be registered, because that is what charge four is calculated on.
Ask the land office which fee reduction measure is in force that day and whether your property qualifies.
Write into the contract who pays which item, one by one rather than in a lump.
All six together take less than half a day, and they bring the figure worked out in advance very close to what is actually paid.
Frequently asked questions
Are the charges based on the sale price or the assessed value?
The transfer registration fee and withholding tax use the assessed value. Specific business tax and stamp duty use the assessed value or the sale price, whichever is higher.
Why do some sellers pay specific business tax and others stamp duty?
Because only one applies. Selling within five years of acquisition triggers specific business tax at 3.3 per cent, but where the seller has been on that house registration for more than one year it does not apply, and stamp duty at 0.5 per cent is paid instead.
How is the withholding tax calculated?
Start from the assessed value, take the standard deduction for the years held, divide by the number of years, calculate tax at the income tax rates, then multiply back by the number of years, counting no more than ten.
How are the holding years counted?
By calendar year rather than by anniversary, so property acquired in late December and sold in early January counts as two years.
What is the mortgage registration fee based on?
1 per cent of the mortgage amount, capped at two hundred thousand baht. That is the amount actually borrowed, not the price of the house and not the assessed value.
How should buyer and seller split the costs?
The law does not dictate it, so it is entirely negotiable. Custom splits the transfer fee equally, leaves the taxes to the seller and the mortgage fee to the buyer, but it should be written into the contract item by item rather than as a lump.
In short
- Transfer day has four charges, and the first three start from the assessed value.
- The transfer registration fee is ordinarily 2 per cent of the assessed value.
- Specific business tax at 3.3 per cent and stamp duty at 0.5 per cent are alternatives.
- More than one year on the house registration exempts the seller from specific business tax even within five years.
- Withholding tax deducts a standard percentage by holding years, then divides and multiplies back.
- Holding over ten years counts as ten, and years are counted by calendar year.
- The mortgage registration fee is 1 per cent of the borrowing, capped at two hundred thousand baht.
- Government fee reductions come and go, so ask which one applies on your day.
- Who pays what is negotiable, so write it into the contract item by item.