Before you actually get hold of the property you want, you still have to pay for it. You will not be able to just get hold of it without paying anything, both to the seller and the government through taxes. Even if you already have the purchasing power at hand, ready to be exchanged with the property you want, there are still some preliminary steps before you will actually experience the peak of the process of real estate ownership, the transfer of the property from the owner or developer to you.
As a matter of procedure, the transfer of the ownership for the property will take place at the Land Office where you will register the property under your name. If you bought the property from a developer even before the said development is completed, the transfer will transpire after the project is finished and ready for you to live in and the title deed issued. If the property has already been built and is ready for occupation, the transfer takes place after contracts are signed and payments have been made.
Usually, the payment of the balance occurs on the day of transfer at the Land Office.
Taxes and Transfer Fees
If you have the obligation to satisfy the seller by paying him the right amount for the property as stipulated on the contract, you and the seller also have obligations to the government that you must comply in the form of various taxes.
You will have to pay: stamp duty tax or special business tax, transfer tax and withholding tax as well as the transfer fees. The Special Business Tax is 3.3% based on the selling price of the company. This will only apply if the property to be sold is within the first five years of ownership. If the property is sold after five years of actual ownership, you will have to pay the stamp duty tax. The stamp duty tax is 0.5% of the selling price. The Land Department also imposes transfer of duty tax when property ownership is transferred.
If the seller is an individual, the withholding tax is based on progressive income tax scale. How much tax and who will pay the tax will be determined through the contract you sign.
Transfer of Ownership between Foreigners in Thailand
You must remember that you can only transfer titles to your name in leasehold and if the property you bought is a condominium. Foreigners are still prohibited from owning land in Thailand. Yes there are other routes in order to stake an ownership of the land and these cannot be done by a foreign individual alone but through a company or through his Thai national wife.
Transferring a title to your name through a Thai company is very complicated. It can be best compared to finding a needle at a haystack. On the other hand, transferring the property to the name of your Thai-national wife is a bit easier than through a Thai company. It seems easier but problems of this route can be very complex when you and your Thai spouse will separate and enter into divorce proceedings. You will have a hard time proving that the property is co-owned by the two of you because the property is named after her.
Another example is the transfer of title and ownership from the original owner to his heir (child). This cannot be executed unless payment has been made. The father cannot simply execute a transfer of property to his son’s name by virtue of a deed of donation alone. In Thailand, even if your son is an heir to the property you live in; the said property will not be transferred under his name if the mode employed is not through a sale. Meaning to say, instead of donor (you) to donee (your son), it will become seller to buyer.
The transfer taxes either you the buyer or the seller will have to pay for the transfer tax. But if it is the seller who will have to pay for the transfer tax, better get ready for prices will definitely be higher. When it you will be the one who will pay the transfer tax then the prices will be more reasonable for you. Title transfer is a complex exercise therefore if you are planning to buy a property in Thailand, make sure that every requisites, every documents and every contracts needed to be agreed upon and signed, are all with you. You must also make sure that you have not violated or will not violate any Thailand laws.
A lawyer will be of great help for you by assisting you with negotiations, interpretations and actual filing of title transfer.
1 thought on “Title Transfer”
I wanted to thank you for helping me learn more about a title transfer. You mentioned that the transfer usually happens at the Land Office where you register the property. I wonder if it could be good to find somewhere close by or somewhere between the properties.