Chapters 10 & 11

Sections 101–102 were part of the original Land Code enacted in B.E. 2497 (1954). They provided basic regulations for commercial land trading. As Thailand's real estate market evolved, these provisions proved insufficient to address modern land development practices, consumer protection concerns, and the complexities of large-scale subdivision projects. The Land Allocation Act B.E. 2543 (2000) was enacted to replace these sections with a far more comprehensive regulatory regime covering land allocation permits, developer obligations, public utilities, common property management, and buyer protections.

The following outlines the standard fees and taxes applicable to land transactions in Thailand. These rates are established under the authority of Section 103 and calculated in accordance with Section 104 of the Land Code, in conjunction with the Revenue Code and related legislation.

Withholding tax on land transfers varies based on whether the seller is an individual or a juristic person:

• Individual sellers: Withholding tax is calculated on the appraised value using a progressive rate scale based on the number of years the property was owned, applied against personal income tax brackets. The calculation uses the appraised value divided by the number of years of ownership (capped at 10 years), applies the progressive income tax rates, then multiplies the result by the number of years.
• Juristic persons (companies): Withholding tax is 1% of the appraised value or declared value, whichever is higher. This withholding tax can be credited against the company's corporate income tax liability.

The Treasury Department (กรมธนารักษ์) is responsible for setting official appraised values (ราคาประเมินทุนทรัพย์) for land throughout Thailand. The appraisal process works as follows:

• Four-year cycle: Appraised values are reviewed and updated every four years. The current cycle covers 2023–2026 (B.E. 2566–2569).
• Valuation factors: The Treasury Department considers location, accessibility (road frontage, proximity to public transport), infrastructure (water, electricity, drainage), land use zoning under the Town Planning Act, historical transaction prices, and local economic conditions.
• Land categories: Different appraised values are set for vacant land, land with structures, and condominiums. Values are further differentiated by zone, sub-district (ตำบล), and district (อำเภอ).
• Public availability: Appraised values can be checked at any provincial Land Office, at the Treasury Department offices, or through the Treasury Department's online lookup system.
• Below-market values: Government appraised values are typically 20–40% below actual market values, although the gap has been narrowing in recent appraisal cycles.

The Thai government periodically announces temporary reductions in land transaction fees and taxes as economic stimulus measures. These reductions are enacted through Cabinet resolutions and ministerial regulations under the authority granted by the Land Code and Revenue Code. Key points to understand about these temporary measures:

• Transfer fee reductions: The government has periodically reduced the standard 2% transfer fee to as low as 0.01% for certain qualifying transactions (such as first-home purchases below a specific price threshold).
• Mortgage fee reductions: The 1% mortgage registration fee has similarly been reduced to 0.01% for qualifying residential mortgages under government stimulus programs.
• SBT reductions: The 3.3% Specific Business Tax has been temporarily reduced under certain stimulus packages.
• Duration and conditions: These reductions are temporary, typically lasting one to two years. They often apply only to specific property types (e.g., residential properties below a certain value), and the government renews, modifies, or lets them expire based on economic conditions.
• Verification: Because these measures change frequently, parties to a transaction should verify the current applicable rates with the Land Department at the time of their transaction. A qualified Thai lawyer or licensed real estate professional can provide guidance on which reductions are currently in effect.

The following guide outlines how to estimate the total government fees and taxes for a standard land purchase transaction in Thailand. This example assumes standard rates without any temporary reductions.

For a property with an appraised value of 5,000,000 THB, sold by an individual who has owned it for 3 years, purchased with a 4,000,000 THB mortgage:

• Transfer Fee: 5,000,000 × 2% = 100,000 THB
• Specific Business Tax: 5,000,000 × 3.3% = 165,000 THB (seller held less than 5 years)
• Withholding Tax: Varies based on progressive calculation (estimated 75,000–150,000 THB)
• Mortgage Registration: 4,000,000 × 1% = 40,000 THB
• Estimated Total Government Fees: 380,000–455,000 THB (7.6%–9.1% of property value)

Note: The allocation of these costs between buyer and seller is a matter of negotiation. By common practice in Thailand, the transfer fee is typically split equally, SBT/stamp duty is paid by the seller, withholding tax is paid by the seller, and the mortgage fee is paid by the buyer. However, these allocations should be clearly specified in the sale agreement.