Chiang Mai Real Estate: Fees and Taxes for Selling Condos

We grasp the intricacies of purchasing and trading a condo in Thailand. In this manual, we'll delve into the costs and levies linked to exchanging real estate in Chiang Mai, Thailand. By the conclusion of this manual, you'll possess an extensive awareness of the enrollment procedure, expenses, and levies connected to trading a condo in Chiang Mai.

Registration Process

The process of registering a condo resale in Chiang Mai is relatively simple. The registration must occur at the local Land Office within 30 days following the change in ownership. The shift in ownership must happen in front of an authorized official, and the transfer fee is due during registration. For reselling a condo in Chiang Mai, registration takes place at the Chiang Mai Land Office. The process involves the purchaser, the vendor, and the condo's legal representative. A transfer fee applies, amounting to 2% of the property's assessed value, and both parties typically agree to split this expense evenly.

Fees

Reselling a condominium in Chiang Mai involves several fees and taxes that both buyers and sellers should be aware of. Below, we outline these fees and provide additional information on the withholding tax calculation process.

1. Transfer Fee

The transfer fee is one of the primary costs associated with reselling a condominium. This fee amounts to 2% of the registered value of the property or the selling price, whichever is higher. The transfer fee is due upon registration at the Land Office.

2. Withholding Tax

When reselling a condominium in Chiang Mai, the seller is responsible for paying a withholding tax on the income generated from the property sale. The withholding tax is calculated based on the property's appraised value and the seller's tax rate, which is determined by their income and the length of property ownership. For individuals, the withholding tax rate is 1% of the appraised value or selling price, while companies are subject to a 2% rate.

Withholding Tax Calculation Process

The withholding tax calculation involves these steps:

1. Ascertain the property's assessed value or sale price, using the greater of the two amounts.
2. Compute the seller's earnings from the property transaction, which is the difference between the sale price and the initial purchase price.
3. Determine the seller's tax rate considering their income and the length of property ownership. Tax rates can fluctuate based on aspects such as marital status, number of dependents, and other deductions.
4. Apply the relevant withholding tax rate (1% for individuals or 2% for companies) to the revenue generated from the sale.

You can refer to the subsequent section for the method of calculating withholding tax.

Additional Fees

Besides the transfer fee and withholding tax, other fees may arise when reselling a condominium in Chiang Mai. These potential fees include legal fees, real estate agent fees, and outstanding common area fees. It is essential to consider these additional costs when planning the resale of your real estate.

By understanding the various fees and taxes involved in reselling a condominium in Chiang Mai, you can better prepare for the transaction and maximize your return on investment.

Taxes

• Income Tax: The seller must pay income tax on any profit gained from the condo sale. The rate depends on the seller's tax bracket and is calculated based on the difference between the sale and original purchase prices.
• Specific Business Tax (SBT): If the seller has owned the property for under five years, they might be subject to a Specific Business Tax. The rate is 3.3% of the sale price or the assessed value, whichever is greater. Exemptions may apply if the seller used the property as their main residence and registered the address in their house registration booklet (tabien baan) for a minimum of one year before the sale.
• Stamp Duty: If the seller is exempt from the Specific Business Tax, they must pay stamp duty. The stamp duty rate is 0.5% of the sale price or the assessed value, whichever is greater.
• Local Development Tax: Local development tax is a property tax imposed by local authorities on the assessed value of the land. The rate depends on the property's location and usage. The seller is usually responsible for this tax.

Conclusion

To sum up, exchanging Chiang Mai real estate, in Thailand encompasses multiple expenses and levies, potentially intricate to tackle. Grasping the enrollment procedure, charges, and taxes implicated enables a fruitful Chiang Mai real estate transaction. At Kaibaanthai, we pledge to furnish our clientele with the know-how and proficiency required to maneuver through Chiang Mai's property market. Should you seek answers or wish to uncover more about trading a condo in Chiang Mai, feel free to reach out to us.

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